Braskem S.A. (BAK): An Undervalued Chemical Stock to Invest In Now

In This Article:

We recently compiled a list of the 10 Undervalued Chemical Stocks to Invest In. In this article, we are going to take a look at where Braskem S.A. (NYSE:BAK) stands against the other undervalued chemical stocks.

Key Trends Shaping the Future of the Chemical Industry

Chemicals are essential to our daily lives and play a crucial role in many sectors. The chemical industry provides the materials needed to create a wide range of products, from medicines and agricultural chemicals to plastics and cleaning supplies. This industry also supports innovations in renewable energy, such as solar panels and wind turbines. It also helps produce lightweight materials for vehicles, advanced batteries for electric cars, and durable building materials.

Increasing demand for sustainable and innovative products, advancements in technology, and urbanization, are some of the key factors driving growth of the chemicals market. According to a report by The Business Research Company, the chemicals market was valued at $5.11 trillion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 8.7% during 2024-2028 to reach a value of $7.78 trillion by the end of the forecast period.

The chemical industry is currently experiencing significant changes driven by sustainability and technological advancements. The industry plays a crucial role in addressing global challenges like climate change and resource efficiency. According to a recent sustainability report titled “Sustainability Starts with Chemistry,” released by the American Chemistry Council (ACC) in May 2024, ACC member chemical companies have made significant progress in reducing emissions. Since 2017, these companies have cut sulfur oxide (SOx) emissions by 43% and nitrogen oxide (NOx) emissions by 18%.

The report highlights that member companies of the ACC are exploring, developing, and deploying various innovative technologies that reduce emissions. These include methods for capturing, using, and storing carbon, as well as producing lower-emissions hydrogen and exploring alternative feedstocks. This showcases their commitment to environmental responsibility and sustainable practices.

Innovation continues to be a top priority for the chemicals industry. On January 16, 2024, McKinsey & Company published an article that discussed a survey conducted by the company of over 200 senior leaders in North America's chemical sector, including top executives from leading companies, investment firms, and startups. The survey found that chemical process innovation is viewed as the most important focus area, with 90% of investors and 97% of industry leaders planning to invest more than $50 million in this area over the next two years. While AI-assisted discovery is not considered the top priority, it remains a significant area of interest. According to the survey results, 43% of investors and 75% of chemical industry leaders are looking to invest over $100 million in AI-driven product development.