BASF SE (BASFn.DE): 2Q26: New €1bn buyback addresses FCF concerns

Research evidence excerpt

BASF SE (BASFn.DE): 2Q26: New €1bn buyback addresses FCF concerns

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29 Jul 2026 01:50:04 ET │ 11 pages

BASF SE (BASFn.DE)

2Q26: New €1bn buyback addresses FCF concerns

CITI'S TAKE

Buy Having already pre-released better preliminary results and raised

guidance, BASF today announced a further €1bn buyback. While we had Price (28 Jul 26 17:30) €48.97

flagged this possibility, our investor discussions suggest it was not widely Target price €58.00

anticipated and should therefore be received positively. The pre-release Expected share price return 18.4%

had already highlighted the main sources of earnings upside; today's Expected dividend yield 4.6%

details show that Others contributed more than expected, supported by Expected total return 23.0%

commodity hedging. The earnings trajectories of Chemicals and Surface

Market Cap €43,707M Tech are somewhat lower than we'd expected, whereas Industrial

US$49,688M Solutions came out stronger. The presentation also provides details on the

monthly price/volume developments in H1 with June the strongest month

(volumes +13% YoY) but no comment on Q3 was given. On strategy, BASF

reported continued progress, with c.7,000 fewer FTEs since January 2024 Sebastian Satz, CFAAC

and around 90% of Ludwigshafen units now deemed competitive, up from +44-203-569-3662

roughly 80% in 2024. sebastian.satz@citi.com

Ranulf Orr, CFA

Implications — The buyback underscores management’s confidence in the group’s +44-20-7986-3922

cash-generation prospects, an area that had, in our view, attracted undue investor

ranulf.orr@citi.com

concern given the unchanged 2026 FCF guidance. We also expect management to

emphasise on the call that the midpoint of the guidance range should not be viewed Omi Pallavi

as the most likely outcome.