BASF: Eyes on the FCF miss

Research evidence excerpt

BASF: Eyes on the FCF miss

Equity Research

European Chemicals & Ingredients

15 July 2026

BASF

Eyes on the FCF miss

First LookBASF pre-released Q2 EBITDA of €2.4bn, ahead of consensus,

and raised FY26 guidance. However, investor focus is likely to

be on FCF of -€200m versus consensus of +€700m, BASFn.DE/BAS GY UNDERWEIGHT European Chemicals &

Ingredientshighlighting working capital pressure from higher raw NEGATIVE

Price Target EUR 40.00

material costs. Macro assumptions also lowered for H2. Price (14-Jul-26) EUR 49.42

Potential Upside/Downside -19.1%

Source: Bloomberg, Barclays Research

Our view: We expect the market to focus on the free cash flow miss versus consensus rather

than the EBITDA beat. While ahead of consensus, we think Q2 adj. EBITDA of €2.4bn was

broadly in line with buyside expectations, while the guidance upgrade was also largely European Chemicals & Ingredients

anticipated and only brings management closer to where investors were already positioned. Katie Richards

The key negative surprise is FCF of around -€200m versus consensus of +€700m, highlighting +44 (0)20 3555 0315

the working capital impact of higher raw material costs. We suspect many investors had not kathryn.richards@barclays.com

Barclays, UKfully considered the cash flow implications of higher oil and feedstock prices following the

recent Middle East escalation. More broadly, this raises the risk that chemicals companies Anil Shenoy

beat on earnings in Q2 but disappoint on cash generation across the sector in general. The +91 (0)22 6175 2487

pre-release also supports the investor narrative of a weaker H2 macro environment. This is anil.shenoy@barclays.com

Barclays, UKfurther supported by BASF lowering its assumptions for global GDP growth, industrial