BASF Nears Dual Inflection Point as Buyback Winds Down and Agricultural IPO Takes Shape
03.06.2026 - 17:05:45 | boerse-global.de
BASF is heading into a pivotal summer with two major transformation tracks converging. The €1.5 billion share repurchase program is set to conclude at the end of June, while the agricultural solutions spin-off moves a step closer to its planned stock market debut. The company's aggressive cost-cutting initiative enters a new phase just as the chemical sector faces persistent headwinds.
The buyback has removed nearly 28 million shares from the market since its launch, with BASF purchasing a further 950,000 of its own shares at the end of May. The program forms part of a longer-term capital return strategy: by 2028, the group intends to funnel roughly €4 billion into repurchases, with the acquired shares subsequently cancelled to boost earnings per share. Combined with a dividend floor of €2.25 per share, total shareholder distributions are expected to reach €12 billion between 2025 and 2028.
Parallel to the buyback finale, the agricultural solutions business is on track for a milestone in early July, when the spin-off company — BASF Agricultural Solutions Deutschland GmbH — is expected to be registered in the commercial register. The so-called hive-down contract was notarised in March, and roughly 2,500 employees at Ludwigshafen and Limburgerhof have transferred to the new legal entity, retroactive to 1 January 2026. The unit will be structured as a European stock corporation and list on the Frankfurt Stock Exchange by the middle of 2027, with BASF retaining a majority stake. The operational separation is running alongside the rollout of a new ERP system, which has already been completed in North America and is slated for all other regions by early 2027.
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As the buyback season draws to a close, the company’s cost-reduction initiative, CoreShift, moves centre stage. Announced in mid-May, the programme targets a 20% reduction in fixed costs within the core business by 2029, measured against the 2024 baseline. The four segments affected are Chemicals, Materials, Industrial Solutions and Nutrition & Care, with a newly created Core Transformation Office coordinating the projects across the group. The earlier cost-saving effort has already exceeded expectations: annual savings reached €1.7 billion by the end of 2025 — €100 million ahead of plan — and the target has now been raised to €2.3 billion by the end of 2026, up from an originally planned €2.1 billion.
The broader industry environment remains challenging. According to the German chemical industry association VCI, production in the chemical and pharmaceutical sector contracted by 6% year-on-year in the first quarter, with revenue falling 5.4%. Capacity utilisation edged up to 75.1%, still below the level required for profitability. VCI managing director Wolfgang Große Entrup described the modest growth that did occur as driven by "geopolitical hoarding" — clients stockpiling chemicals amid fears of supply disruptions via the Strait of Hormuz due to the Iran conflict — and stressed that there is no sign of a genuine recovery. "The hardest part is still ahead of us," he warned.
The stock has recovered sharply from its 52-week low of around €42, but remains about 8% below the year’s high of €55.05, trading at €50.53 on Wednesday. Analysts are divided on the outlook. Deutsche Bank rates the shares a Buy with a €60 target, while Goldman Sachs is even more bullish, lifting its price target to €65. JP Morgan, however, maintains an Underweight rating and a €40 target, despite having raised it from an even lower level.
For the current financial year, BASF continues to forecast EBITDA before special items of €6.2 billion to €7.0 billion. The first quarter contributed €2.4 billion to that target. With the buyback support about to vanish, the focus will shift squarely to operational performance. The next major catalysts are the commercial register entry for the agri spin-off in July and the publication of second-quarter and half-year results on 30 July, which will show whether CoreShift is already starting to deliver.
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