BASF SE (BASFn.DE): Prepping for the possibility of a pre-release today

Research evidence excerpt

BASF SE (BASFn.DE): Prepping for the possibility of a pre-release today

BASF SE (BASFn.DE)

10 July 2026 Citi Research

Looking ahead, Covestro indicated that Q3 is tracking closer to Q1 than Q2 levels, whereas Vara currently forecasts Q3

Materials EBITDA slightly below Q1. This should underpin Q3 expectations for Materials, although both the YoY and QoQ

comparisons suggest consensus is broadly in the right range.

Figure 1. Covestro's QoQ performance indicates upside Figure 2. ...but not when from a YoY perspective

risk to Materials consensus

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission.

© 2026 Citigroup Inc. No redistribution without Citigroup's written permission. Source: Citi Research, Company Reports, Vara

Source: Citi Research, Company Reports, Vara

What to do with the stock? The shares have now fallen back below pre-war levels with positioning relatively bearish, in

particular among London-based hedge funds. At current valuations, we believe the risk/reward is skewed to the upside, as

the case for a gradual recovery in underlying demand remains intact, with global manufacturing PMIs still hovering near four-

year highs. While the market appears to be discounting the temporary earnings tailwinds from Middle East-related supply

disruptions, these have nevertheless generated an unexpected cash inflow, which could support accelerated shareholder

returns. In addition, should our expectation of rising protectionism in Europe materialise, with further policy developments

emerging during Q3, we would expect BASF to be among the key beneficiaries given its substantial European manufacturing

footprint.

*Note that BASF’s management tend to hold their board meetings on Fridays.