BASF's €400 Million Gas Headwind Leaves Jefferies Cold on 2027
Published on 11/11/2026 at 15:12 | Editorial boerse-global.de
Jefferies has cut BASF to "Underperform" from "Hold," keeping a €44 price target unchanged, as analyst Priyanka Patel warned that the chemicals giant's 2027 operating profit will land about 5% below the analyst consensus. The downgrade lands ahead of two scheduled markers: an agricultural capital markets day on 24 November and fourth-quarter 2026 results due 26 February 2027.
At the heart of Patel's case is a supply glut that she expects to persist into the new year. With no demand recovery in sight, chemical spreads across BASF's key product chains sit roughly 30% below mid-cycle levels, and on spot prices they could shed another 15% on average in 2027 versus the prior year. That combination leaves little room for the margin rebound the market has been hoping for.
A €400 Million Energy Bill
Layered on top is energy. Jefferies estimates a negative earnings impact of about €400 million for 2027 based on gas price futures, with energy accounting for some 5% of cost of sales. Higher gas prices raise the bar for the company's savings drive: for a durable improvement in earnings, the relief from cost cuts would need to arrive alongside steadier margins.
Should investors sell immediately? Or is it worth buying BASF?
That savings drive is CoreShift, which targets a 20% reduction in fixed cash costs by 2029 compared with 2024. It is the lever BASF controls directly, in contrast to energy prices, which remain at the mercy of the market. Investors weighing the earnings outlook need to hold both sides in view at once.
The Numbers Behind the Call
Jefferies projects 2027 EBITDA before special items of €7.4 billion, against a consensus of €7.9 billion. On its estimates, BASF trades at 8.4 times enterprise value to expected EBITDA for the next twelve months — a 10% premium to the sector average. That premium sharpens the scrutiny on execution: it is easier to justify if BASF delivers on costs and beats downbeat expectations, while continued margin erosion would argue for a more cautious valuation.
The wider analyst community is split. Ten analysts rate the stock a buy, nine sit at hold or neutral, and six lean negative — a spread that reflects genuinely divergent views on how quickly the operating picture can stabilize.
For a more constructive stance to take hold, demand and margins would need to turn up. Until then, Patel's forecast sets a cautious benchmark: BASF would have to navigate the overcapacity and energy costs better than she expects to weaken the case for her bearish call.
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