BASF: Patients impatiently awaiting
BASF, the world's largest chemical producer, is gearing up to publish its second-quarter figures on July 30, amidst a cautious market sentiment and potential lower full-year guidance.
In a recent statement, Markus Kamieth, the CEO of BASF, emphasised the company's readiness in all major regions, particularly focusing on China, which he sees as the market of the future. This strategic emphasis on Asia, particularly China, is evident in BASF's significant investments in the southern Chinese province of Guangdong.
However, analysts are expressing concerns about the economic and geopolitical tensions that could impact BASF's performance. Warburg Research analyst, Robert-Jan van der Horst, has even suggested a possibility of a profit warning due to these tensions.
Deutsche Bank analyst, Virginie Boucher-Ferte, predicts a ten percent year-on-year decline in BASF's second-quarter operating result, with a projected adjusted EBITDA of €1.77 billion. Furthermore, Boucher-Ferte expects BASF to reduce its 2025 earnings forecast, with net income attributable to shareholders shrinking from €430 million to €409 million.
These predictions come after BASF reported declines in both revenue and profit at the start of the year, with factors such as declining prices and lower sales volumes in agriculture, basic chemicals, and nutrition and care ingredients businesses affecting the company's performance.
In an attempt to mitigate these challenges, BASF has initiated savings programs with a goal to save €2.1 billion annually by the end of 2026.
Despite the negative outlook, UBS notes that BASF shares have been weak but could react positively to the Q2 earnings report, expected in a few weeks, especially if the company provides favourable news. UBS also highlights that BASF is heavily shorted, implying market skepticism about its near-term outlook, with investors betting on a price decline.
In light of these factors, it is advised for BASF shareholders to hold their position, with a stop-loss at €31.00, and there is no compelling reason to buy BASF shares at the moment, according to the assessment of the BASF shareholder.
It is important to note that no explicit forecast numbers from Deutsche Bank or Warburg Research for Q2 are available in the search results. However, some relevant insights can be inferred, suggesting cautious expectations for Q2 and beyond.
The publication contains material from dpa-AFX.
In the midst of these cautious market expectations and potential lower full-year guidance, investors might find interest in BASF's second-quarter figures, which could indicate opportunities for investing in its finance sector, given the company's strategic emphasis on Asia, particularly China, and significant investments in Guangdong province. However, analysts' concerns about economic and geopolitical tensions could impact BASF's performance, as suggested by the potential profit warning from Warburg Research's Robert-Jan van der Horst.
