BASF's $1 Billion Geismar Bet Meets Berenberg's Cautious Hold
Published on 11/10/2026 at 12:41 | Editorial boerse-global.de
BASF has confirmed that its new MDI production facility at the Geismar integrated site will be inaugurated on 11 November 2026, capping an investment of roughly USD 1 billion. The plant is designed for an annual capacity of about 600,000 metric tons — a headline commitment that lands just as Berenberg reaffirms a more guarded stance on the chemicals group's equity.
The brokerage reiterated its "Hold" rating and EUR 51.50 price target today, following an investor event in New York. For analyst Sebastian Bray, the central question is whether the profitability that has recently flattered results can be matched again in 2027.
Bray points to comments from CEO Markus Kamieth describing a resilient short-term business. That gives BASF credit on the operating side; the cautious rating hinges on durability. Profitability in upstream chemicals, driven by the Iran war, sets a high bar for the year ahead in the analyst's view.
Divestment and expansion in parallel
Alongside the Geismar project, BASF has signed a contract with ALTA Performance Materials covering its Palatal business in Chile. Under the agreement announced on Friday, ALTA would take over the unit from BASF. Completion remains subject to customary conditions, including the necessary regulatory approvals, and Palatal stays part of BASF until then. Financial terms were not disclosed.
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The transaction follows a fresh upgrade to the group's 2026 earnings guidance roughly two weeks ago. BASF now expects EBITDA before special items of EUR 7.4 billion to EUR 7.8 billion for the year.
Revenue growth outpaces per-share earnings
Third-quarter 2026 figures show sales of EUR 16.36 billion, up from EUR 14.33 billion a year earlier — a rise of 14%. EBITDA before special items climbed 15% to EUR 1.6 billion, and both lines came in above the prior-year quarter on company figures.
The bottom line tells a different story. Earnings per share came in at EUR 0.18, below the year-earlier level, as restructuring costs weighed on net profit. Free cash flow improved to EUR 523 million from EUR 398 million.
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Two layers therefore sit side by side for investors: a raised operating outlook and stronger cash generation on one hand, and a Hold recommendation on the other, as long as the repeatability of Iran-war-boosted profitability remains uncertain. How sturdy the current earnings level proves in the coming financial year is the question on which the broker's view turns.
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