BASF SE Below-consensus 2H guide = significant downside to 2027 consensus; valuation/FCF yield remain unattractive

研报英文原文证据摘录

BASF SE Below-consensus 2H guide = significant downside to 2027 consensus; valuation/FCF yield remain unattractive

ropean Industrials

of the below-consensus 2H26 guidance has now played out, we remove the shares

(44-20) 7742-8733

from Negative Catalyst Watch. We remain UW with an unchanged Dec-27 PT of €40. sam.edmunds@jpmorgan.com

• While much remains uncertain around the nature and scale of the ongoing Key Changes (FYE Dec)

ME conflict, we believe the recent renewed optimism on BASF/cyclical Prev Cur Δ

chemicals is premature for the following reasons:1) Chemical producers in Adj. EPS - 26E (€) 2.87 3.18 10.8%

China/Asia, who were typically most exposed to the Strait of Hormuz for the Adj. EPS - 27E (€) 2.43 2.41 -0.8%

Adj. EBITDA - 26E (€ mn) 7,025 7,353 4.7%

sourcing of oil/naphtha (the key oil-based feedstock for petchems) prior to this Adj. EBITDA - 27E (€ mn) 6,716 6,705 -0.2%

conflict, have shown greater flexibility in sourcing feedstocks from alternative

regions than was originally expected. This means that chemical industry Style Exposure

oversupply may persist even in a tighter feedstock market = potential of an even

greater margin pressure. 2) In general, there are no signs of panic buying and/or

a material uplift in chemical prices in Asia/Europe yet, despite the bounce in

oil prices over the past week or so. In fact, the newsflow on chemicals blogs

(e.g. ICIS) suggests that spot prices/ margins in Europe for most commodity

chems have been falling over the past week, while in China spreads for most

commodity chems are already at or below Feb end levels. Details here.

• Highlights from the 2Q26 preannouncement: BASF expects 2Q26 sales of

€17.2bn (+3%/+4.5% vs the pre-results JPMe/Vara cons.), up 18% YoY

organically (prices +11%, volume +7%).