BASF’s €4.1 Billion Quarter: Coatings Windfall Fuels Profit but Can’t Bridge the Analyst Divide
Published on 07/18/2026 at 16:01 | Redaktion boerse-global.de
The stock market’s reaction to BASF’s preliminary second-quarter numbers told its own story. Despite a headline net profit that exploded to €4.1 billion — more than 50 times the €79 million recorded a year earlier — the shares inched up just 0.58% to close Friday at €48.60. That left the stock a full 11.72% below its 52-week high of €55.05 hit in April, a sign that investors are looking past the accounting boost from the coatings sale and focusing on the underlying operating picture.
The earnings blowout was almost entirely driven by a €3.9 billion pre-tax book gain from the completion of the coatings business disposal to private equity firm Carlyle, which closed on June 30. On the operating side, revenue climbed 16% to €17.2 billion, beating consensus of €16.5 billion, while EBITDA before special items jumped to €2.4 billion — well ahead of the €2.1 billion analysts had forecast and up from €1.6 billion in the prior-year period. The strength was enough for the Ludwigshafen-based group to raise its full-year EBITDA guidance to a range of €6.9 billion to €7.7 billion, from the previous €6.2 billion to €7.0 billion.
Yet the free cash flow narrative remains a clear point of tension. Management chose to leave the 2026 free cash flow target unchanged at €1.5 billion to €2.3 billion, even as the second quarter is expected to deliver a negative €0.2 billion figure. The culprit is higher capital tied up in working capital as raw material prices rise, a mechanical drag that the one-off gain from Carlyle cannot disguise. That cash squeeze helps explain why analysts are so sharply divided on the stock’s trajectory.
Should investors sell immediately? Or is it worth buying BASF?
The gap between the most bullish and most bearish targets is now 23 euros. Goldman Sachs reiterated its “Buy” recommendation with a €63 price target, while Citi also stayed at “Buy” with €58. On the other side, Jefferies rates BASF a “Hold” with a €44 target, and Barclays went as far as “Sell” with just €40. Berenberg’s Sebastian Bray cut his target to €47 on July 17, citing falling base chemical prices and weak Chinese economic data, while Bernstein Research maintained an “Outperform” rating with a €61 target, pointing to the quarterly beat. The wide spread reflects not just differing views on the coatings deal’s long-term impact, but also on how much the European chemical industry’s structural headwinds matter. The VCI reported that German chemical production fell 3% in the first half of 2026, a reality that tempers any optimism from a single strong quarter.
Operationally, BASF continues to invest in growth areas. On July 16, the group inaugurated a new production facility in DĂĽsseldorf for specialty emollients used in skincare and sunscreen products, with an investment in the mid-double-digit million-euro range. Meanwhile, media reports on July 14 confirmed that plans for a partial IPO of its Agricultural Solutions division, targeting the second quarter of 2027, are gaining substance. Shareholders had already approved the necessary carve-out at the annual general meeting in April.
Investors will now look to the full half-year report due on July 29, when BASF provides detailed segment results and holds analyst and press conferences. Only then will the market be able to gauge how sustainable the operational improvement is beyond the non-recurring coatings effect — and whether the stock’s current valuation, trapped between bullish targets and cash-flow realities, can find a way to break out.
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BASF Stock: New Analysis - 18 July
Fresh BASF information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
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