BASF Shares Rise: Bearish Analyst Moves To Neutral on Policy Tailwinds

BASF SE shares (ETR: BAS) climbed 0.75% to €51.14 in early trading Tuesday following a notable shift in analyst sentiment from one of its most bearish observers. Berenberg upgraded the German chemicals giant from Sell to Hold, simultaneously raising its price target to €48 from €38, citing anticipated fiscal stimulus in Germany and potential delays to European carbon taxation as catalysts that now outweigh previous valuation concerns.

The upgrade marks a significant reversal for Berenberg, which had downgraded BASF to Sell back in 2024, and remained bearish since. At that time, the firm highlighted macroeconomic headwinds including disappointing German industrial production and persistent overcapacity issues in China's chemicals sector. The latest reassessment suggests that political developments may be creating a more supportive backdrop for European industrials, particularly those facing structural cost pressures from environmental regulations.

The potential deferral of carbon tax implementation across Europe represents a material development for BASF, whose operations are heavily exposed to energy costs and emissions-related levies. Combined with speculation around German fiscal stimulus measures, these policy shifts could provide temporary relief to margin pressures that have weighed on the chemicals sector throughout 2024 and into early 2025.

Markets remain divided on BASF's near-term trajectory, however. While Berenberg has turned less bearish, other major institutions continue to express caution. JPMorgan downgraded the stock from Neutral to Underweight in March 2025, cutting its price target from €52 to €45 and revising downward its adjusted EBIT forecasts for both 2025 and 2026. The Wall Street bank cited concerns over earnings momentum amid a challenging operating environment for specialty chemicals producers.

Portfolio optimization efforts have also accelerated. BASF divested its Brazilian decorative paints division for $1.15 billion, exceeding initial valuation expectations. The company continues to evaluate strategic options for its broader Coatings business, with assets valued in excess of €5 billion. Decisions on this portfolio review are expected in the coming months and could unlock significant value while allowing BASF to focus capital on higher-margin specialty chemicals segments.

The stock now trades at €51.14, above Berenberg's newly established €48 price target but below the €52 level that JPMorgan previously considered fair value before its downgrade. This positioning reflects the market's attempt to balance near-term political tailwinds against persistent fundamental challenges in the chemicals industry. With analyst price targets ranging from €37 to €52 over the past six months, BASF remains a stock where opinion is sharply divided.

The upgrade from Berenberg may provide short-term support for the shares, particularly if concrete details emerge around German fiscal stimulus or carbon tax deferrals. However, the broader analyst community appears unconvinced that these policy developments will be sufficient to offset structural headwinds including Chinese overcapacity and weak European industrial demand.