BASF’s Half-Year Report Looms as Coatings Windfall and Cash Squeeze Set the Stage
Published on 07/26/2026 at 18:22 | Redaktion boerse-global.de
Investors will be poring over the fine print on Wednesday when BASF publishes its full half-year financial report at 7:00 a.m. CET, followed by analyst and press conferences. The market already knows the headline numbers from the preliminary second-quarter release in mid-July — an EBITDA before special items of €2.4 billion that comfortably beat both consensus and the prior-year quarter, alongside a 16% revenue jump to €17.2 billion. But the question now is whether the detail will confirm the rosy picture or expose cracks in the foundation.
The most eye-catching figure in the preliminary data was net profit of €4.1 billion, nearly double the €2.4 billion analysts had penciled in. That outperformance, however, came almost entirely from a one-off gain: the €3.9 billion pre-tax profit on the sale of BASF’s Coatings business to Carlyle, which closed on June 30. Strip that out, and the underlying earnings story becomes more nuanced.
On the back of the strong quarter, management raised its full-year guidance. BASF now expects EBITDA before special items to land between €6.9 billion and €7.7 billion in 2026, up from the previous range of €6.2 billion to €7 billion. The upgrade was a clear signal of confidence, but it also raised the stakes for the second half — particularly given the geopolitical uncertainties that could either boost or batter performance.
One area that will draw intense scrutiny is cash flow. The preliminary numbers showed free cash flow swinging to minus €0.2 billion from plus €0.5 billion a year earlier, a deterioration BASF attributed to higher working capital tied up in rising raw material costs. For many retail investors, dividend safety remains the primary reason for holding the stock, making the cash flow trajectory a critical metric. Analysts will want clarity on inventory levels and the investment outlook for the rest of the year.
Should investors sell immediately? Or is it worth buying BASF?
The segment breakdown will be the real test. All eyes are on the Chemicals and Materials divisions, which are most exposed to raw material prices and global industrial demand. The Surface Technologies unit is another key watchpoint. BASF has been reshaping its portfolio under the “Winning Ways” strategy, and the Coatings divestment is now complete. The company recently decided to hold onto parts of its housing portfolio for now, signaling a more selective approach to asset sales. The question is whether the core business can deliver the margin improvement needed to justify the upgraded guidance.
That’s far from certain given the broader industry backdrop. The German chemical-pharmaceutical sector remains under pressure, with first-half production down roughly 3% year-on-year and revenue slipping 1% to €106 billion, according to the VCI industry association. VCI President Markus Steilemann described the current uptick as “only a breather, not a turning point,” pointing to inventory restocking driven by fears of supply disruptions linked to Middle East tensions. Competition from Asia also eased temporarily after the Strait of Hormuz was blocked, but those dynamics are fragile.
BASF itself has tied its second-half outlook directly to geopolitics. The company says the coming months hinge on the outcome of negotiations between the US and Iran. A prolonged closure of the Strait of Hormuz would weigh heavily on economic activity, while a swift deal could provide an additional growth impulse. That binary risk leaves the guidance range wide open.
On the chart, the stock closed Friday at €48.60, down 0.42% on the day but still up 9.39% since the start of the year. That puts it 11.7% below its 52-week high from April. The relative strength index sits at 51.0, signaling a neutral market — Wednesday’s report could tip the balance either way. The first technical hurdle to the upside is the 50-day moving average at €49.17. A clean break above that level would open the path toward the 52-week high of €55.05.
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Analyst views remain split. DZ Bank’s Peter Spengler raised his fair value target from €63 to €64 and kept a “Buy” rating, arguing that revenue and operating earnings clearly beat consensus estimates. He also lifted his forecasts for 2026 through 2028. Berenberg, by contrast, sticks with a “Hold” rating, reflecting the caution that still surrounds the stock.
Wednesday’s report will need to show that the operational recovery in the core chemicals business is real and sustainable — not just a function of one-off gains and temporary geopolitical tailwinds. For a company that has raised expectations, the detail now matters more than the headline.
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BASF Stock: New Analysis - 26 July
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