UBS announced on Monday that it had upgraded its recommendation on Arkema from 'sell' to 'neutral', with a price target raised from €80 to €105, following the fourth-quarter results published by the French chemicals group.

The analyst justifies his upgrade by two factors, starting with the strength of prices for its specialty materials, whose resilience enabled the company to more than offset the decline in volumes.

The intermediary also cites a favorable investment outlook, with spending to support the launch of new projects now coming to an end, which should boost free cash flow (FCF).

As a result, UBS says it has raised its earnings per share (EPS) guidance by an average of 22% over the next three years, while noting that its estimates are still below consensus targets.

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