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BASF SE (BASFY)
OTHER OTC:BASFY
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BASF SE
(OTC:BASFY)
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Rating:59Neutral
Price Target:
$15.00
▲(20.39% Upside)
Action:ReiteratedDate:03/02/26
The score is driven primarily by only moderate financial strength: profitability has recovered and cash flow is positive, but declining revenue and weak free-cash-flow conversion limit the upside. Technicals are moderately supportive (price above key longer-term averages with mild MACD strength), while valuation is mixed—strong dividend yield but a high P/E. The latest earnings call adds a balanced but cautious outlook, with disciplined CapEx and cost actions offset by near-term margin, FX, and demand pressures.
Positive Factors
Diversified global business and scale
BASF's wide-ranging product portfolio and global footprint provide durable revenue diversification across industries (automotive, construction, agriculture, consumer goods). Scale supports cost advantages, cross-selling and resilience to single-market shocks, underpinning long-term cash generation potential.
Consistent operating cash generation
Sustained positive operating cash flow gives BASF the financial flexibility to fund strategic investments, manage cyclical downturns and support dividends/buybacks. Even with volatile FCF conversion, stable cash from operations is a durable pillar for capital allocation and debt servicing.
Stronger capital discipline and portfolio actions
Management's explicit capex reduction, accelerated cost-savings and active portfolio realizations (Coatings transaction, Ag Solutions separation) signal durable improvements in capital efficiency and strategic focus, enhancing long-term return on invested capital and reducing cyclicality exposure.
Negative Factors
Declining revenue trend
A multi-year top-line contraction weakens operating leverage and makes profit recovery harder. Sustained revenue declines can force margin trade-offs, reduce fixed-cost absorption and constrain reinvestment plans, increasing sensitivity to economic cycles over the medium term.
Margin pressure from China overcapacity
Structural overcapacity in China and persistent pricing pressure reduce long-term margin sustainability for commodity segments. Even with new assets like Zhanjiang, prolonged low-price environments can delay payback, compress segment returns and pressure group-wide profitability.
Weak free cash flow conversion and variable cash drivers
Low FCF conversion versus earnings and volatile cash drivers (working capital swings, trading positions) limit durable cash available for debt reduction or shareholder returns. This variability raises financing risk if cyclical pressures persist and limits predictable capital allocation.
BASF SE (BASFY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$49.54B
Dividend Yield4.91%
Average Volume (3M)169.31K
Price to Earnings (P/E)25.3
Beta (1Y)0.81
Revenue Growth-1.26%
EPS Growth-45.61%
CountryUS
Employees111,408
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)-0.10
Shares Outstanding3,570,088,600
10 Day Avg. Volume155,454
30 Day Avg. Volume169,312
Financial Highlights & Ratios
PEG Ratio1.27
Price to Book (P/B)1.19
Price to Sales (P/S)0.69
P/FCF Ratio30.50
Enterprise Value/Market Cap1.32
Enterprise Value/Revenue1.07
Enterprise Value/Gross Profit4.28
Enterprise Value/Ebitda10.83
Forecast
1Y Price Target
$14.00Price Target Upside12.36% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.72
Revenue Forecast (FY)$70.72B
BASF SE Business Overview & Revenue Model
Company DescriptionBASF SE operates as a chemical company worldwide. The company operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems, such as isocyanates and polyamides, as well as inorganic basic products and specialties for plastic and plastic processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, pigments, resins, electronic materials, antioxidants, light stabilizers, oilfield chemicals, mineral processing, and hydrometallurgical chemicals. The Surface Technologies segment offers chemical solutions and automotive OEM, which include refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical industries. The Nutrition & Care segment provides nutrition and care ingredients for food and feed producers, as well as pharmaceutical, cosmetics, detergent, and cleaner industries. The Agricultural Solutions segment offers crop protection products and seeds, such as fungicides, herbicides, insecticides, and biological crop production products, as well as seed treatment products. The company has strategic partnerships with Contemporary Amperex TechnologyCo., Limited on battery materials solutions, including cathode active materials and battery recycling. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.
How the Company Makes MoneyBASF generates revenue through a diversified model that includes the production and sale of chemicals, plastics, and agricultural products. Its key revenue streams arise from the sale of performance products, which encompass a range of specialty chemicals for various applications; agricultural solutions, which include crop protection products and seeds; and industrial solutions such as coatings and adhesives. The company also benefits from its extensive global network, allowing it to serve a wide array of industries while leveraging economies of scale. Significant partnerships and collaborations with major corporations in related fields enhance its market presence and innovation capabilities. Additionally, BASF's investments in research and development drive new product offerings and improve existing ones, contributing to sustained revenue growth.
BASF SE Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: strong strategic and operational milestones (Zhanjiang start‑up, Ag Solutions progress and margin, MDI expansion, portfolio realizations, cash‑flow and cost‑savings progress) contrast with meaningful near‑term financial headwinds (declining EBITDA, pricing pressure, currency impacts, China overcapacity and one‑time restructuring costs). Management emphasizes discipline on capex, costs and portfolio actions to navigate a challenging 2026 that is expected to be transitional.Q4-2025 Updates
Positive Updates
Successful Zhanjiang-Verbund Site Start‑Up
All 32 key production lines at the Zhanjiang site were started on time and below budget; steam cracker started without lost time and is flexible on feedstock. Management expects a slightly negative earnings contribution in the first year of operation but positive earnings contribution from 2027.
Agricultural Solutions Strong Performance and IPO Path
Agricultural Solutions delivered an EBITDA margin before special items of 22%; separation work (legal entity and ERP) on track for completion by early 2027 and IPO readiness targeted for 2027. Acquisition of AgBiTech (complementary biologicals) expected to close H1 2026.
Major MDI Capacity Expansion in the U.S.
Geismar MDI expansion is on track with total investment of USD 1 billion — BASF's largest U.S. investment — doubling Geismar MDI capacity to ~600,000 metric tons/year with start-up planned for Q3 2026.
Portfolio Realizations and Coatings Transaction
Divestment of Decorative Paints completed; agreement with Carlyle for Coatings values the business at an enterprise value of EUR 8.7 billion and is on track to close in Q2 2026. BASF to retain 40% equity stake, creating upside potential.
Cash Flow and Balance Sheet Improvements
Free cash flow improved by around EUR 600 million to EUR 1.3 billion; cash flow from operating activities was EUR 5.6 billion. Net debt reduced to EUR 18.3 billion and equity ratio remained solid at 45.1%.
Cost Savings and Organizational Streamlining
Achieved an annual cost reduction run rate of ~EUR 1.7 billion by end‑2025 (EUR 100 million above original target for that date); target for end‑2026 raised to EUR 2.3 billion (from EUR 2.1 billion). Senior executives reduced by 11%; overall headcount reduced by 4,800 (excluding ~1,000 hires at Zhanjiang).
Capital Discipline: Lowered CapEx Guidance
Group plans capex of EUR 13 billion for 2026–2029 (20% lower than prior 4‑year forecast and >30% lower than 2024–2027 planning). 2026 capex expected at EUR 3.3 billion versus EUR 4.0 billion in 2025 (≈‑17.5%).
Shareholder Returns
Proposal to pay a dividend of EUR 2.25 per share (≈5.1% yield based on year‑end price) and share buybacks initiated (≈EUR 355 million repurchased by year‑end 2025).
Negative Updates
Decline in EBITDA and Margin Pressure
Group EBITDA before special items for full year 2025 was EUR 6.6 billion, down versus prior year. Q4 EBITDA before special items fell to EUR 1.0 billion from EUR 1.4 billion in the prior‑year quarter (≈‑28.6%), driven by lower margins and weak market demand—notably in the Chemicals segment.
Sales and Pricing Headwinds
Overall sales declined considerably in Q4 due to strong currency headwinds and slightly lower prices; prices fell in 5 of 6 segments (most notably Chemicals and Materials) despite modest volume gains (volumes up overall; China volumes +13% in Q4).
Currency and Market Volatility Impact
Currency effects reduced Q4 EBITDA before special items by ~EUR 110 million and full‑year currency headwinds amounted to ~EUR 235 million. Management warns of further currency headwinds in Q1 2026 of up to ~EUR 200 million.
China Overcapacity and Short‑Term Margin Pressure
While Zhanjiang was successfully started, the Chinese market suffers from overcapacity and price pressure; management expects a gradual margin recovery but notes that short‑term profitability for the new site will be constrained until ramp‑up and market improvements (positive contribution not expected until 2027).
One‑Time Restructuring Costs and Increased Severance
Onetime costs tied to cost‑savings amounted to EUR 700 million in 2025 (≈EUR 300 million higher than originally planned, i.e., +~75% vs plan); cumulative onetime costs now expected at EUR 1.9 billion.
Weaker Operating Cash Flow Drivers and Trading Positions
Cash flow from operating activities declined to EUR 5.6 billion from EUR 6.9 billion (mainly due to changes in other operating assets caused by increased precious metal trading positions).
Local and Social Concerns over Real‑Estate Disposal and Job Moves
Announced sale of ~4,400 BASF‑owned flats in Ludwigshafen raised social and political concerns locally; planned service‑hub moves to India and Malaysia imply further restructuring of IT/Finance/HR services and potential job relocations (details and job counts not yet finalized).
Challenging 2026 Outlook
Management expects 2026 to remain a transitional year with no meaningful market upswing: guidance for EBITDA before special items EUR 6.2–7.0 billion and free cash flow EUR 1.5–2.3 billion; expects lower GDP and industrial production growth and further pressure on chemical production in mature economies.
Company Guidance
BASF guided that for 2026 it expects EBITDA before special items of EUR 6.2–7.0 billion, free cash flow of EUR 1.5–2.3 billion and payments for property, plant & equipment and intangibles of about EUR 3.4 billion, based on assumptions of Brent at USD 65/barrel and an exchange rate of $1.20/€, while Q1 2026 FX headwinds could cut EBITDA by up to ~EUR 200 million. Management reiterated a 2026–2029 CapEx envelope of EUR 13 billion (20% below last year’s four‑year forecast), with 2026 CapEx of EUR 3.3 billion (vs. EUR 4.0 billion in 2025) and only ~EUR 600 million more for Zhanjiang after EUR 1.6 billion in 2025. Cost measures were accelerated to an annual run‑rate of ~EUR 1.7 billion by end‑2025, with 2025 one‑offs of EUR 700 million (up ~EUR 300 million), 2026 one‑offs trimmed to EUR 300 million, a revised end‑2026 savings target of EUR 2.3 billion (cumulative one‑offs ~EUR 1.9 billion). Other reported metrics: FY‑2025 EBITDA before special items EUR 6.6 billion (Q4: EUR 1.0bn vs EUR 1.4bn prior year; Q4 FX ≈EUR 110m; FY FX ≈EUR 235m), net income EUR 1.6 billion (+25%), free cash flow EUR 1.3 billion, cash flow from operations EUR 5.6 billion (vs EUR 6.9bn), net debt EUR 18.3 billion, total assets EUR 76.2 billion, equity ratio 45.1%; dividend proposal EUR 2.25/share (yield ~5.1%) and buybacks ~EUR 355 million YTD; strategic milestones include Zhanjiang’s 32‑line start‑up (slightly negative year‑1, positive from 2027), MDI Geismar USD 1 billion expansion to ~600,000 tpa (start Q3 2026), Agricultural Solutions EBITDA margin ~22% with IPO readiness targeted for 2027, and Coatings enterprise value ~EUR 8.7 billion (Carlyle close targeted Q2).BASF SE Financial Statement Overview
Summary
Results are stabilizing after 2022–2023: earnings turned positive again and operating cash flow remains consistently positive. Offsetting this, revenue is still contracting (2025 down ~9.5% YoY), profitability is only modest (2025 net margin ~2.7%), and free-cash-flow conversion is weak/variable (FCF to net income ~0.24), keeping performance sensitive to the cycle.Income Statement
Profitability has improved from the 2022 loss and the near-breakeven 2023 result to positive earnings in 2024–2025, with margins recovering to modest levels (2025 net margin ~2.7%, EBITDA margin ~10.5%). However, the top line is shrinking: revenue declined in 2024 and fell again in 2025 (down ~9.5% YoY), and operating profitability remains well below the 2021 peak, highlighting a weaker demand/price environment and a still-cyclical earnings profile.54
Neutral
Balance Sheet
Leverage appears manageable for a large chemical company, with debt-to-equity in the ~0.57–0.74 range over 2022–2025 and equity remaining substantial. Returns on equity have rebounded from negative/low levels (2022–2023) to mid-single digits in 2024–2025, but the balance sheet has modestly weakened versus 2021 as debt-to-equity has trended higher and equity has come down, limiting financial flexibility if the downturn persists.63
Positive
Cash Flow
Operating cash generation remains solid and consistently positive across the period, supporting resilience through the cycle. Free cash flow improved sharply in 2025 (strong growth off a low 2024 base), but conversion is still a key watch item: free cash flow is a relatively small share of earnings in 2025 (free cash flow to net income ~0.24), and cash flow metrics show variability year to year, suggesting working-capital and/or capex swings.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 57.30B | 65.26B | 68.90B | 87.33B | 78.60B |
| Gross Profit | 13.68B | 17.09B | 16.70B | 21.07B | 19.80B |
| EBITDA | 6.01B | 7.77B | 7.33B | 10.22B | 10.84B |
| Net Income | 1.56B | 1.30B | 225.00M | -391.00M | 5.52B |
Balance Sheet | |||||
| Total Assets | 77.99B | 80.42B | 79.93B | 84.47B | 87.38B |
| Cash, Cash Equivalents and Short-Term Investments | 2.76B | 2.98B | 2.68B | 2.75B | 2.83B |
| Total Debt | 24.41B | 24.00B | 21.35B | 20.95B | 19.14B |
| Total Liabilities | 43.67B | 43.53B | 43.28B | 43.55B | 45.30B |
| Stockholders Equity | 33.18B | 35.60B | 35.28B | 36.60B | 40.79B |
Cash Flow | |||||
| Free Cash Flow | 1.29B | 748.00M | 2.72B | 3.33B | 3.71B |
| Operating Cash Flow | 5.39B | 6.95B | 8.11B | 7.71B | 7.25B |
| Investing Cash Flow | -3.08B | -5.08B | -4.99B | -3.78B | -2.62B |
| Financing Cash Flow | -2.32B | -1.55B | -2.90B | -4.01B | -6.46B |
BASF SE Technical Analysis
Positive
12.46
Price Trends
13.83
Positive
13.24
Positive
12.95
Positive
Market Momentum
-0.12
Positive
50.92
Neutral
80.60
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BASFY, the sentiment is Positive. The current price of 12.46 is below the 20-day moving average (MA) of 13.99, below the 50-day MA of 13.83, and below the 200-day MA of 12.95, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 50.92 is Neutral, neither overbought nor oversold. The STOCH value of 80.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BASFY.
BASF SE Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
59 Neutral | $49.54B | 25.30 | 4.82% | 4.91% | -1.26% | -45.61% | |
58 Neutral | $6.14B | -3.97 | -25.13% | 0.29% | -7.34% | -382.79% | |
57 Neutral | $2.05B | -6.29 | -10.06% | 8.44% | -3.46% | -191.77% | |
56 Neutral | $25.83B | -6.34 | -15.53% | 9.17% | -5.25% | -208.14% | |
51 Neutral | $1.06B | -1.41 | -29.85% | 8.27% | -7.81% | -334.15% | |
47 Neutral | $1.63B | -49.30 | 128.17% | ― | -10.68% | 36.31% |
* Basic Materials Sector Average
BASFY
BASF SE
13.93
-0.10
-0.69%
CE
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56.07
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-3.95%
BAK
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4.46
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14.65%
HUN
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11.80
-4.63
-28.17%
TROX
TRONOX
6.68
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DOW
Dow Inc
36.00
0.77
2.20%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.