Wacker Chemie Stock Declines on Equinet Capacity Concern

Wacker Chemie AG retreated from a 2 1/2-week high after Equinet Bank AG cut its recommendation to sell, saying excess polysilicon production will limit earnings at the solar-panel material supplier.

Wacker Chemie fell as much as 5.8 percent to 54.64 euros and was trading down 5.4 percent at 11:33 a.m. in Frankfurt, valuing the company at 2.86 billion euros ($3.77 billion). Volume was 37 percent of the three-month daily average.

The manufacturer, which posted first-quarter earnings that matched analyst estimates, said on April 30 demand for solar panels in the period was “noticeably” higher, pushing the stock that day to the highest price since April 12. Polysilicon-industry overcapacity and expansion plans mean the best-case scenario for product prices is to stay stable, Stefan Freudenreich, a Frankfurt-based analyst at Equinet.

“Despite solid volume demand, Wacker Chemie’s polysilicon business remains under margin pressure as persisting overcapacities give not much hope for a recovery,” Freudenreich said today in a research report. The analyst, who reduced his recommendation from hold, also cut his stock-price estimate for Wacker to 48 euros from 53 euros.

The chemical maker, which is based in Munich, reiterated that full-year earnings will probably decline because of lower prices for solar silicon and semiconductor wafers. Wacker is majority-owned by the founding family’s holding company.