In a report released yesterday, Sebastian Bray from Berenberg Bank downgraded BASF SE (BASFY – Research Report) to a Hold, with a price target of $13.60.
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Sebastian Bray has given his Hold rating due to a combination of factors influencing BASF SE’s current market situation. The stock has seen a significant rally, about 22% from early January lows, which, coupled with the lack of upward potential in consensus EBITDA for 2025/26, suggests limited further upside. Despite potential positive catalysts like the divestment of business units at favorable multiples and prospective political and economic support from Germany and China, the market has already priced in these factors.
Additionally, the current high European natural gas prices and the potential threat of tariffs create a cautious outlook. The upcoming German elections introduce further uncertainty, potentially affecting industrial policies. Moreover, while peace in Ukraine could lower gas prices, it might not result in a swift return to pre-war levels, especially given the competitive disadvantages in European production costs. These complexities lead to a Hold stance, as the expected benefits may not be immediate or substantial enough to justify a Buy recommendation.