BASF SE (BAS) is a German chemical company, recognised for its broad portfolio, which encompasses chemicals, materials, industrial solutions, surface technologies, nutrition & care, and agricultural solutions. The company serves customers across nearly all sectors worldwide.
For investors evaluating the chemicals sector, BASF SE is certainly a stock to consider.
BASF Share Price & Chart
Over the last few years, BASF shares have struggled. The stock has been in a range since 2022, and, prior to that, it was in a long-term downtrend that saw it fall from over EUR 95 to below the EUR 40 mark. It is currently (as of July 30) trading at EUR 44.25 per share, up around 3.7% for the year-to-date and down around 2.3% over the last three months.
P/E Ratio Average (End of 2024): 29.3
Dividend Yield: 5.08%
BASF EPS and Revenue Breakdown 2020-2024
BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany. It is recognised as one of the largest chemical producers in the world, operating six Verbund sites and 235 production sites globally.
The company’s primary listing is on the Frankfurt Stock Exchange (Xetra), and it is a constituent of the DAX index. Earlier this year, Linde and BASF signed a long-term agreement in France for the supply of hydrogen and steam.
BASF Stock Forecast
Data compiled by TradingView indicates that of the 26 analysts covering the stock, 14 have a “Buy” rating, while 8 have a “Hold” rating and 4 have a “Sell” rating.
A View From the Bulls: Morgan Stanley analyst Thomas Wrigglesworth recently upgraded the firm’s rating for BASF to “Overweight” from “Equal Weight” in a note to clients, raising the price target to EUR 54 from EUR 46 per share. The analyst told investors that he sees catalysts in the shares based on the potential divestment of the Coatings unit. Wrigglesworth also sees a free cash flow inflection for the company.
Generally, the bull case for BASF shares focuses on the company’s diversified portfolio across various industries, as well as its strategic emphasis on cost reduction and operational efficiency. The company’s “Verbund” system is also seen as a long-term competitive advantage. Furthermore, for income-focused investors, BASF’s dividend yield is also seen as attractive. However, it is also worth noting that the dividend was recently reduced.
A View From the Bears: Analysts at Jefferies recently downgraded BASF SE to “Hold” from “Buy,” highlighting what it sees as a deteriorating earnings outlook, alongside the current ongoing challenges in market fundamentals. The firm reduced its price target for BASF shares to EUR 47 from EUR 52. Jefferies explained in a note to clients that its downgrade reflects the continued weakness in upstream product spreads, which it views as a key earnings headwind.
Furthermore, Jefferies stated that while it views internal initiatives, such as asset divestments, positively, it is doubtful that they can fully offset the downward pressure from lagging spreads and subdued demand.
Meanwhile, in May, Berenberg reduced its earnings forecasts for BASF, citing a weaker US dollar, tariff issues, and lower margins in the company’s chemicals and materials sectors. The firm highlighted tough conditions for the company ahead of its second-quarter results on July 30. They believe that weak chemical spreads and tariff uncertainties stemming from the US will hinder a quick recovery.
Average Analyst Consensus 12-Month Price Target: EUR 50.36
Our View: While BASF holds a strong position in the chemical industry, it continues to face significant headwinds from a challenging macroeconomic environment and evolving demand dynamics. While the company is actively implementing cost-saving measures and focusing on its core strengths, achieving sustained strong profitability requires overcoming these external pressures. Investors should monitor the effectiveness of its strategic adjustments, particularly its ability to improve profitability.
Who Should Buy BASF Shares
Several investor profiles might find BASF a suitable addition to their portfolios:
Long-term investors: Those with a positive outlook and the patience to hold through a challenging period may prefer the stock.
Dividend-paying stock: BASF has a history of consistent dividends, appealing to income-focused investors.
A European industrial firm with a diversified portfolio: BASF’s broad range of products and global presence offer resilience across varied market conditions.
