Bernstein Names Akzo Nobel Top Q2 Pick, Flags Solvay as Biggest Earnings Risk

Bernstein has named Akzo Nobel its highest-conviction tactical pick ahead of the second-quarter earnings season, arguing that market fears of a guidance cut are overblown. In a note to clients, the brokerage stated it expects a largely solid reporting period for the chemicals sector with limited changes to full-year outlooks, but it highlighted specific opportunities and risks among the companies it covers.

Top Pick: Akzo Nobel

Bernstein's analysts believe consensus expectations for Akzo Nobel are too bearish, particularly regarding a potential reduction in the company's full-year 2026 earnings guidance. While the market anticipates guidance of around €1.42 billion in EBITDA, Bernstein's model projects €1.48 billion, and the firm sees a guidance cut as "highly unlikely."

The brokerage's confidence stems from a lack of evidence for significant volume weakness and a belief that raw material cost inflation will be manageable. Bernstein stated that only low single-digit price increases would be needed to maintain the neutral raw material spread assumed in the company's current guidance.

Caution Warranted on Solvay and Air Liquide

In contrast, Bernstein identified Solvay as having the weakest near-term risk-reward profile. Although the firm expects an in-line Q2 EBITDA result, it warns that even a modest miss could cause investors to doubt Solvay's ability to meet its full-year guidance range of €770 million to €850 million.

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Bernstein's own 2026 EBITDA forecast for Solvay is €774 million, near the bottom of the official range. This projection assumes a Q4 restart for the Sadara peroxides plant and no further deterioration in demand or soda ash pricing, highlighting the vulnerability of the outlook.

Air Liquide Expectations Elevated

For industrial gas supplier Air Liquide, Bernstein remains positive on the underlying business but is cautious about elevated investor expectations. The firm believes consensus forecasts for comparable growth in the second half of 2026 are too high, particularly in the Large Industries segment.

Despite modeling lower growth, Bernstein's full-year profitability forecast is largely in line with consensus, projecting 2026 adjusted EPS of €6.76 compared to a consensus of €6.43. The brokerage noted the primary concern is managing market expectations rather than any fundamental weakness in the company's performance.