A glimmer of possibility persists...

In the second quarter of 2025, BASF, the German multinational chemical company, reported sales of €15.8 billion, a slight decrease from the previous year due to negative currency effects and lower prices in the Chemicals segment. Despite this, the company saw positive volume growth in Agricultural Solutions and other areas. EBITDA before special items was around €1.8 billion, with higher earnings in Agricultural Solutions, Surface Technologies, and Nutrition & Care, offset by margin pressure in base chemicals [1].

For the full year 2025, BASF has adjusted its outlook due to ongoing macroeconomic and geopolitical uncertainties. The company expects its group EBITDA before special items to rise moderately to between €8.0 billion and €8.4 billion, primarily from Materials, Nutrition & Care, Industrial Solutions, and Surface Technologies segments. However, EBITDA in Chemicals is forecasted to decrease slightly [3].

Analyst James Hooper's price target for BASF remains at 51 euros, while Jefferies has reaffirmed its "Hold" rating for BASF shares. However, some analysts have downgraded BASF due to weak EPS performance and low net margins [2]. Bernstein Research, on the other hand, has rated BASF's DAX stocks as "Outperform".

The focus is now shifting to next year, where there is a risk that expectations for the entire chemical sector will be revised downwards. Analyst Hooper sees a revised probability of a ceasefire in the Ukraine conflict at 55 percent, down from 65 percent previously. He believes that a ceasefire and subsequent peace process could lead to decreases in energy prices and a revival in industrial production, making gas producers potential beneficiaries [4]. BASF is also mentioned as a positive individual case.

Despite the conflict of interest disclosure regarding the publication of information about BASF, it does not affect the earlier mentioned focus on next year's expectations for the chemical sector or the need for BASF to achieve relatively strong growth next year. Similarly, it does not affect the analysts' opinions about BASF's potential beneficiaries or the risk of revised expectations for the chemical sector.

Mr. Bernd Foertsch, the CEO and majority shareholder of Boersenmedien AG, holds direct and indirect positions in BASF. Boersenmedien AG, the publisher, has a potential conflict of interest in its coverage of BASF due to Mr. Bernd Foertsch's positions. However, this disclosure does not provide any new information about the current fluctuation of BASF shares or the Ukraine conflict's revised probability of a ceasefire.

In summary, BASF faces near-term challenges from market and economic factors but plans to leverage growth segments to drive moderate improvement in earnings over the medium term. Analyst downgrades suggest caution due to weak profitability metrics and some missed expectations. Despite this, some analysts remain optimistic about BASF's potential, particularly in the context of a potential ceasefire in the Ukraine conflict.

| Aspect | Short-term (Q2 2025) | Long-term (2025 full year outlook) | |------------------------------|---------------------------------------------|---------------------------------------------------| | Sales | €15.8 billion, slight volume growth | Slightly lower demand growth expected | | EBITDA before special items | ~€1.8 billion (slightly down QoQ) | €8.0–8.4 billion (modest growth vs 2024) | | Margins | Pressure in Chemicals, better in Ag Solutions | Margin pressure upstream, mixed across segments | | Analysts' EPS forecasts | Missed Q2 consensus EPS ($0.14 vs $0.20) | Estimated EPS ~0.83 for 2025 | | Free cash flow | Not reported for Q2 | €0.4–0.8 billion (slightly down from 2024) | | Risks | Currency effects, price declines in Chemicals | Macroeconomic slowdown, geopolitical uncertainties|

[1] Source [2] Source [3] Source [4] Source