BASF: Chemical pioneer in the fight against climate change and the resource crisis!

Imagine a world where chemical innovations not only power industrial processes but also solve global challenges such as climate change and resource scarcity. This is exactly where BASF SE comes in, one of the leading companies in the DAX, which shapes the chemical industry with its strategic focus on research and development (R&D). A look at current trends and industry growth shows how BASF is positioned to continue to play a key role in a dynamic global market.

The chemical industry is facing a paradigm shift, driven by the need for sustainable solutions. According to BASF's latest report, the company invested around 2.1 billion euros in R&D in 2023, up from 2.298 billion euros the previous year, and filed around 1,000 new patents, 42.2% of which are aimed at sustainability ( BASF report 2023 ). With 10,000 employees worldwide in this area and a focus of 83% of expenditure on application and customer-related projects, BASF generated sales of over 10 billion euros with products resulting from R&D activities over the last five years. These numbers illustrate how much innovation drives the growth of the industry and BASF in particular. The global market for chemical products continues to be shaped by the demand for environmentally friendly materials and processes, an area in which BASF can clearly score points with its goal of increasing sales and earnings through sustainable products.

At the global level, BASF faces a heterogeneous competitive environment in which Asia-Pacific stands out as a growth engine. The region is benefiting from increasing demand for specialty chemicals in the automotive and electronics industries. BASF recognized this and completed the expansion of its Innovation Campus in Shanghai in mid-2023 to strengthen proximity to these dynamic markets. At the same time, Europe, particularly the Ludwigshafen location, remains the heart of research activities. A new catalyst and solids technology center will be put into operation here in 2024, which is intended to advance the development of more efficient production processes. In North America, the Northeast Research Alliance (NORA) celebrated its tenth anniversary in 2023 and was renamed the North America Open Research Alliance, underlining the importance of collaborations with 280 universities and research institutes. These globally distributed research centers, supplemented by the central “Group Research” area, bundle cross-divisional topics and ensure BASF a competitive advantage through access to external expertise and talent ( BASF innovation ).

A closer look at regional markets shows that Europe remains a stable pillar for BASF despite high energy costs and regulatory hurdles. The EU's strict environmental regulations force companies to invest in green technologies - an area in which BASF shines with its expertise in chemical synthesis, biotechnology and catalysis. In North America, however, the revival of industrial production is driving demand for innovative materials, while Asia-Pacific continues to record high growth rates due to urbanization and industrialization. BASF adapts to these regional differences by specifically aligning its value chain – from raw material refinement to the formulation of active ingredients with excipients – to local needs. The close collaboration between business and application-related units as well as the integration of digitalization into R&D processes strengthen this flexibility.

Another trend that is shaping the industry is the increasing importance of collaborations. BASF uses its global network with top universities and research institutes to develop market-driven innovations and add new creative projects to its portfolio. Academic research alliances and the work of the safety laboratory, which provides high-quality data and analyzes for robust safety concepts, underline the strategic depth of these partnerships. Such initiatives are crucial to achieving growth goals in a market characterized by rapid technological change and increasing cost pressures.

If we navigate through the complex landscape of the chemical industry, what is striking is how BASF SE holds its own in a highly competitive market. With total sales of 68.9 billion euros in the 2023 financial year, the group remains a heavyweight, despite economic headwinds and strategic challenges. A deeper insight into market shares, main competitors and competitive advantages reveals why BASF continues to play a central role and what hurdles still need to be overcome.

BASF holds a significant market share in the global chemicals sector, especially in segments such as Surface Technologies, which was the area with the highest sales in 2023 with over 16 billion euros. Divided into six business areas – Chemicals, Materials, Surface Technologies, Industrial Solutions, Agricultural Solutions and Nutrition & Care – the group covers a broad spectrum. Nevertheless, the numbers also reflect burdens: the third significant drop in profits since 2020 shows that rising energy and raw material prices as well as high inflation rates since 2022 have been putting pressure on margins. In Europe, bureaucratic hurdles and regulatory pressure are also putting a strain on competitiveness, as current analyzes make clear ( Statista BASF overview ).

BASF competes against giants such as Dow Chemical, DuPont and the German Covestro, which also rely on specialty chemicals and sustainable solutions. Dow Chemical has a strong presence in North America and aggressive cost-cutting programs, while DuPont is applying pressure with its focus on high-performance materials in the electronics and automotive industries. Covestro, on the other hand, with a focus on polyurethanes and polycarbonates, represents direct competition, especially in Europe, as both companies fight for market share in automotive supplies. One specific area where BASF and its rivals are vying for dominance is the automotive coatings market. BASF's Color Report 2022 shows that achromatic colors such as white and black dominate, while chromatic colors such as orange or green are gaining importance - a trend that competitors such as DuPont are also actively pursuing ( Color and varnish BASF Color Report ).

What are BASF's strengths compared to these players? A decisive advantage is the integrated network structure, which makes it possible to design production processes efficiently and to use synergies between the segments. This structure reduces costs and increases flexibility, especially in volatile markets. Added to this is its strong innovative strength: with investments in new technologies and a broad portfolio of specialty chemicals, BASF can respond to trends such as the demand for sustainable materials. The strategic expansion into growth markets such as China, for example through the new Verbund site in Zhanjiang, also positions the group favorably to benefit from increasing demand in Asia, while competitors such as Covestro are less well represented in this region.

Nevertheless, there are also challenges. The planned cuts of at least 3,300 jobs worldwide, many of them at the main plant in Ludwigshafen, as well as the closure of several production facilities signal a radical austerity course with the goal of saving one billion euros by 2026. Such measures could weaken competitiveness in Europe in the short term, particularly as high operating costs and declining purchasing power continue to weigh on consumer industries. At the same time, the announced change of the operational managing director in April 2024, when Markus Kamieth takes over the leadership, entails both risks and opportunities for a realignment of the strategy.

Another aspect that sets BASF apart from the competition is its ability to adapt to specific customer needs. In the area of ​​automotive paints, for example, the company is responding to the growing preference for chromatic colors such as blue or orange, while maintaining a strong position with white as the most popular color due to its high resale value. This market orientation, coupled with global presence, could be crucial to gaining ground in a highly competitive environment.

Let's delve into the world of numbers at BASF SE, where financial indicators tell the true story of a company. The latest developments in sales, profits and margins paint a picture of stability in the midst of stormy times, but also of challenges that require strategic action. A detailed look at the balance sheet and operating results shows how the chemical giant reacts to global and regional pressures.

In the 2023 financial year, BASF achieved sales of 68.9 billion euros, a value that signals a certain robustness despite economic headwinds. If you compare this with the figures from 2020, when sales were 59,149 million euros, growth is visible, even if the momentum was dampened by external factors. At that time, positive price effects, in particular due to increased precious metal prices in the Surface Technologies segment (+1,487 million euros), and acquisitions such as Solvay's polyamide business (+683 million euros) had a supportive effect. However, negative influences came from currency effects (-1,945 million euros) and lower sales, especially in the Materials and Industrial Solutions segments (-298 million euros), as the group report makes clear ( BASF Group management report 2020 ).

However, a look at the profit development shows that BASF has been struggling with significant declines since 2020 - 2023 marks the third setback in a row. Exact profit figures for 2023 are not yet fully available, but the ongoing problems in the automotive industry, which accounts for 15-20% of sales, are putting a significant strain on earnings. The decline in production in Europe and America is having a direct impact, as recent reports underline ( SWR Current ). EBITDA and margins are under pressure as rising energy and raw material prices drive up operating costs. While specific EBITDA figures for 2023 are pending, previous reports indicate that margins have shrunk noticeably since 2022 due to external cost burdens and declining purchasing power of the buyer industries.

BASF's balance sheet figures also reveal mixed signals. In recent years, the group has had to raise debt capital to secure liquidity, which has increased the debt ratio. Exact figures on the equity ratio or net assets for 2023 are not yet available, but the strategic savings programs, which target a cost reduction of one billion euros at the Ludwigshafen site, indicate a focus on financial stability. Measures such as the closure of plants and job cuts - in Ludwigshafen the number of employees fell by 700 to around 38,000 - are aimed at easing the burden on the balance sheet. However, it remains unclear how many jobs will be affected in the long term, and negotiations over a new site security agreement, which expires at the end of next year, could bring further uncertainty.

A positive aspect amidst the challenges is the dividend policy. A distribution of 3.40 euros per share was announced for 2024, which could signal a certain level of confidence to investors despite the difficult earnings situation. At the same time, the board under the future leadership of Markus Kamieth emphasizes that the Ludwigshafen location should become “leaner but stronger”. This suggests a focus on competitive assets - around 80% of production sites are considered viable in the long term, while others are slated for closure. Such structural adjustments could stabilize margins in the medium term, even if the process of plant closures remains time-consuming.

BASF's financial situation is also characterized by external dependencies. The close connection to the automotive industry means that any recovery or further weakness in this sector will have a direct impact on sales and profits. At the same time, investments in growth markets such as China, where new Verbund locations are emerging, could diversify the earnings base in the long term and reduce dependence on weak markets in Europe and America.

Let's take a journey through time through the stock market charts to take a closer look at the price development of BASF SE. The stock's historical data reveals patterns of booms and busts that are closely linked to economic cycles and company-specific developments. A comparison with the DAX and an analysis of volatility provide valuable insights into how the chemical company is holding up in the market and what risks exist for investors.

A look back at the share price trends shows that BASF has had inconsistent performance over the years. Looking at the historical data available through platforms such as Onvista, it is clear that the stock reached highs during periods of global economic strength, such as before the 2008 financial crisis, while crises such as 2020 due to the pandemic or 2023 due to energy price jumps led to noticeable declines. For detailed analysis, investors can download historical prices as a CSV file to examine individual time periods - from one month to several years ( Onvista Historical Courses ). For example, it can be seen that the share rose from around 60 euros to over 70 euros between 2018 and 2021 before falling back to below 50 euros in 2022 due to margin pressure and a slump in profits. These fluctuations reflect the company's sensitivity to external factors.

The volatility of BASF shares remains a key point for risk assessments. Over the past five years, average annual volatility has been around 25-30% based on daily price movements. This indicates moderate to high volatility, which is exacerbated by macroeconomic uncertainties such as rising raw material prices or geopolitical tensions. Particularly in crisis years like 2020, the stock showed peaks in volatility, with monthly fluctuations of up to 10%, while more stable phases, around mid-2021, showed smaller fluctuations. For investors, this means that BASF shares carry increased risk in turbulent market phases, but can also offer opportunities for countercyclical purchases.

Compared to the DAX, the leading German index, BASF shows a mixed development. While the DAX rose from around 9,000 points (2013) to over 18,000 points (2023) over the last ten years, an annual return of around 7-8%, BASF was unable to consistently keep up with this performance. Between 2013 and 2018, the stock performed largely in line with the index, with an annual return of around 6%. Since 2019, however, BASF has been lagging behind due to industry-specific challenges such as high energy costs and dependence on the automotive industry. While the DAX rose by over 15% during the pandemic recovery in 2021, BASF stagnated with a return of less than 5%. This divergence makes it clear that internal company factors and sector risks are weighing more heavily on the stock than the broader market.

Another point of comparison is megatrend stocks and other indices such as the Nasdaq 100, whose long-term development is also informative. Data series show that since December 1999, the Nasdaq 100 has risen from a base of 10,000 to over 55,000 in 2025, while megatrend stocks have even climbed to over 6 million. BASF cannot compete with such growth rates because the chemical sector benefits less from technological disruptions than tech indices. Nevertheless, the share remains relevant for conservative investors because it offers stability through dividend yields - announced for 2024 at 3.40 euros per share ( Boerse.de BASF analysis ).

BASF's share price development will continue to be influenced by external and internal drivers. Macroeconomic factors such as the development of energy prices or a possible recovery in automobile production could provide short-term stimulus. At the same time, a lot depends on the strategic measures, such as the austerity programs and the realignment under the leadership of Markus Kamieth from 2024. The question for analysts remains whether the share will be able to dampen the volatility and move closer to the performance of the DAX again.

Let's look through the lens of macroeconomic developments to decipher the framework conditions for BASF SE. Factors such as interest rate developments, raw material prices and demand developments shape the chemical giant's operational landscape as well as the strategic decisions of management. These elements form a complex structure that will significantly influence the company's future performance.

Let's start with interest rate developments, which are of central importance for a capital-intensive company like BASF. The building interest rates for ten-year loans are currently 3.6% (as of November 5th, 2025), and over 80% of the experts surveyed expect stable conditions in the short term, supported by a robust internal market situation in the EU and an inflation rate close to the ECB's 2% target. In the medium term, however, 60% of experts predict an increase to around 4%, driven by geopolitical tensions, new tariffs and high national debt. This could mean higher financing costs for BASF, especially since the group has taken on debt capital in recent years. A rise in interest rates would make refinancing existing debt more expensive and put a strain on investments in growth markets such as China, as current analyzes make clear ( Interhyp interest rate forecast ).

Another critical factor is raw material prices, which directly affect BASF's operating costs. Since 2022, the prices for energy and chemical raw materials have risen sharply, which is significantly depressing margins. In Europe in particular, high gas and electricity costs are putting a strain on production, while geopolitical uncertainties - such as conflicts or trade restrictions - are making price developments volatile. A slight easing is expected in 2024 and 2025 if global supply chains stabilize, but a decline to pre-crisis levels is unlikely. BASF must therefore continue to focus on cost efficiency, for example by closing uneconomical plants in Ludwigshafen in order to cushion the price increase.

The development of demand shows a mixed picture. In key segments such as automotive, which accounts for 15-20% of sales, production in Europe and America remains weak, slowing sales of specialty chemicals and paints. At the same time, growth markets such as Asia-Pacific offer potential: urbanization and industrialization are driving demand for materials and agricultural solutions, which is why BASF is targeting increasing demand with projects such as the Verbund site in Zhanjiang. However, global inflation has been dampening the purchasing power of consumer industries since 2022, which is putting a strain on sales in the short term. A recovery in demand depends heavily on macroeconomic factors such as a stabilization of energy prices and a revival of automobile production.

The orientation of management is crucial for overcoming these challenges. With the change at the top in April 2024, when Markus Kamieth takes over operational leadership, BASF is facing a potential change in strategy. Kamieth has already emphasized that he wants to make the Ludwigshafen location “leaner but stronger”, which suggests a continuation of the radical austerity measures. Planned savings of one billion euros by 2026, the reduction of at least 3,300 jobs worldwide and the closure of further plants signal a clear focus on efficiency. At the same time, the new management's ability to prioritize investments in sustainable innovations and growth markets will be crucial to securing long-term competitive advantages.

The combination of rising interest rates, volatile raw material prices and inconsistent demand presents management with complex tasks. Strategic decisions such as diversifying production locations and adapting to regional demand patterns could help minimize risks. The negotiation of a new location securing contract for Ludwigshafen, which expires at the end of 2025, will also be a test of the company's social and economic responsibility. How BASF overcomes these challenges remains a central point for further development.

Let's take a look at the geopolitical waves that could influence BASF SE's price. In a world characterized by trade conflicts, sanctions and political instability, the chemical company faces external challenges that are testing its global presence and operational stability. These factors directly impact supply chains, margins and strategic decisions, making accurate analysis essential.

Trade conflicts are putting a noticeable strain on BASF, particularly due to the uncertainties resulting from customs policy between the EU and the USA. Despite recent agreements, there is still no clarity, as CEO Markus Kamieth emphasizes. Customers are holding back on orders as a long list of exemptions from tariffs on chemical products is expected. CFO Dirk Elvermann emphasizes that the order situation can currently only be estimated a maximum of a month in advance. This uncertainty, exacerbated by the tariff policy under the US government, is putting pressure on planning security and could dampen short-term sales in important markets such as North America and Europe, as recent reports make clear ( BASF stock market newspaper warning ).

Sanctions and geopolitical tensions are further aggravating the situation. Although BASF is not directly affected by sanctions against specific countries, there are indirect effects on raw material supplies and energy prices. Conflicts such as the Ukraine War have driven up gas and oil prices in Europe, massively increasing production costs at the Ludwigshafen site. In addition, new trade restrictions or sanctions against important trading partners such as China, where BASF is investing heavily with the Verbund site in Zhanjiang, could jeopardize expansion plans. Overcapacity in basic chemicals in China is already putting pressure on margins, and further political restrictions could increase this pressure.

Political stability – or lack thereof – also plays a central role. In Europe, regulatory hurdles and bureaucratic requirements put companies at a competitive disadvantage, while uncertainty about future economic policy in the US after the 2024 elections makes planning difficult. BASF expects slowing growth in the second half of the year, especially in Europe, as the board emphasizes. At the same time, China remains a growth engine, but political tensions between Western states and Beijing could weigh on strategic investments in the region in the long term. The uncertainty has led BASF to lower its forecast for 2025, with adjusted operating profit (EBITDA) between 7.3 and 7.7 billion euros, compared to 8.0 to 8.4 billion euros previously.

The company's reaction to these external risks is reflected in an accelerated austerity course. BASF plans to achieve annual savings of 1.6 billion euros by the end of the year and cut investments by at least 200 million euros. The focus on core businesses is being strengthened by the group restructuring, including the preparation of a possible IPO of the agricultural division by 2027. Such measures are intended to increase resilience to geopolitical and trade policy uncertainties, but they also pose risks, especially with regard to long-term innovative strength and competitiveness.

The latest quarterly figures already reflect the effects of these uncertainties. In the second quarter of 2023, operating profit fell by 9% to almost 1.8 billion euros, sales fell by 2% to 15.8 billion euros, and profit for shareholders shrank to 79 million euros, after 430 million euros in the previous year. These figures illustrate the extent to which external factors such as trade conflicts and political instability are impacting earnings. For a more detailed analysis, the full figures are expected on July 30, 2023, which could provide further insights into the group's adjustment strategies.

Let’s delve into the operational foundations that keep BASF SE’s engine running. Order backlog, delivery bottlenecks and production capacities form the backbone of daily business activities and provide information about how well the chemical company can react to current market conditions. These factors are crucial to assess the company's short-term stability and long-term growth prospects.

BASF's backlog is under pressure, which is reflected in the latest industry-wide data. According to the Federal Statistical Office, the order backlog in the manufacturing sector fell by 0.2% in June 2024 compared to the previous month and by 6.2% compared to the previous year. Particularly relevant for BASF is the 0.7% decline in the automotive industry, which has been ongoing for 17 months, as this sector accounts for 15-20% of sales. The order backlog has a range of 7.2 months, with capital goods – an important area for BASF – having a range of 9.7 months. CFO Dirk Elvermann recently emphasized that the order situation can only be planned a maximum of a month in advance, which illustrates the uncertainty among customers and the reluctance to place orders ( Destatis order backlog 2024 ).

Delivery bottlenecks represent another challenge that has burdened BASF in recent years. Global supply chain disruptions, compounded by geopolitical tensions such as the Ukraine war and trade conflicts, have limited the availability of raw materials and intermediate products. In Europe in particular, high energy prices and limited gas supplies are impacting the supply of chemical raw materials, which is delaying production. In China, overcapacity for basic chemicals is putting price pressure on margins, while delivery delays from this region could affect production plans for specialty chemicals. While BASF has taken steps to diversify supply chains, ongoing volatility remains a risk to order fulfillment.

BASF's production capacities are also in focus as the company responds to economic challenges with radical austerity measures. At its headquarters in Ludwigshafen, where around 38,000 employees are employed, the group plans to close several uneconomical plants in order to save costs of one billion euros by 2026. CEO Markus Kamieth emphasizes that 80% of the plants should remain competitive in the long term, but reducing capacity could limit flexibility in the short term if demand increases. At the same time, BASF is investing in growth markets such as China, where the new Verbund site in Zhanjiang is scheduled to go into operation in 2024. This expansion aims to increase capacity in Asia Pacific to capitalize on local demand.

The combination of declining orders on hand and delivery bottlenecks is putting BASF under pressure to use production capacity efficiently. In Europe, where demand will weaken in the second half of 2023, reducing facilities in Ludwigshafen could reduce costs, but carries the risk of not being able to react quickly enough in the event of a sudden recovery in demand. In the automotive industry, a key market, weakness remains a key issue, while other areas such as other vehicle manufacturing (e.g. aircraft, ships) offer potential with a 1.7% increase in orders in June 2024.

The strategic adjustment of production capacities and the management of delivery bottlenecks will be crucial in order to stabilize the order backlog in the long term. BASF must continue to diversify its supply chains and at the same time find the balance between cost reduction and flexibility. How these operational challenges impact financial performance remains a key focus for the coming quarters.

Let's explore the innovation front where BASF SE is shaping the future of chemistry. Technological advances, a robust patent portfolio and high spending on research and development (R&D) position the group as a pioneer in the industry. These elements are not only drivers for long-term growth, but also crucial for overcoming global challenges such as sustainability and resource scarcity.

BASF sets standards in the area of ​​technological advances, particularly with innovative solutions for the automotive industry. The latest collection “Automotive Color Trends 2025-2026” entitled “DRIVING THE PROXY” from BASF Coatings shows how technology and design go hand in hand. With 45 new colors, including regional key colors such as TESSERACT BLUE for EMEA or PHYGITAL MAGNETAR for Asia Pacific, BASF integrates multi-color pigments and metallic-liquid surfaces. Many of these colors are based on renewable or recycled raw materials, which underlines the focus on sustainability. Digital and virtual color tools also support automobile manufacturers in planning future models, which illustrates the company's innovative strength ( BASF Coatings News 2025 ).

A strong patent portfolio underpins BASF's technological leadership position. In 2023, the group filed 1,046 new patents, 42.2% of which have a direct focus on sustainability. This number places BASF among the chemical industry leaders in the Patent Asset Index, an indicator of the quality and influence of patents. The patents cover a wide range, from new formulations – the mixture of active ingredients with excipients to improve applicability – to processes along the value chain. Such intellectual property rights not only secure competitive advantages, but also long-term revenue streams through licensing and partnerships.

BASF's R&D spending is another cornerstone of its innovation strategy. In 2023, around 2.1 billion euros flowed into research and development, cementing the company's position as one of the largest investors in this area. Around 83% of these expenditures were application and customer-related, while 17% covered cross-functional topics that are bundled in the global Group Research unit. With 10,000 employees worldwide in R&D, spread across research centers in Europe, North America and Asia-Pacific, BASF generated sales of over 10 billion euros with new products from these activities in the last five years. The goal of increasing sales and earnings through sustainable products remains central ( BASF report 2023 ).

The global presence of research activities further strengthens the innovative strength. Ludwigshafen remains the largest research location, where a new catalyst and solids technology center will be opened in 2024 to develop more efficient production processes. At the same time, the BASF Innovation Campus in Shanghai was expanded in 2023 to take advantage of its proximity to the dynamic markets in Asia-Pacific. Collaborations with 280 universities and research institutes worldwide, including the North America Open Research Alliance (formerly NORA), which celebrated its tenth anniversary in 2023, ensure access to external expertise and talent. These networks promote the exchange of knowledge and accelerate the development of market-driven solutions.

Technological advances and a strong commitment to R&D could help BASF remain competitive despite economic headwinds such as declining backlogs or geopolitical uncertainties. The focus on sustainable innovations, for example through recycled raw materials or energy-efficient processes, fits with global trends and regulatory requirements, especially in Europe. At the same time, the high investment expenditure poses risks if the market launch of new products is delayed or demand continues to weaken in key segments such as the automotive industry.

Let's look into the crystal ball to explore BASF SE's medium-term prospects for the next three to five years. With a strategic focus on growth and increasing efficiency, the chemical company is facing a crucial phase in which both opportunities and risks could set the direction. A detailed outlook, supported by possible scenarios and key growth drivers, helps to assess the company's future development.

The outlook for BASF until 2028 shows ambitious goals, as formulated by the board of directors under Markus Kamieth. The company is targeting EBITDA before special items of 10 to 12 billion euros, compared to 7.3 to 7.7 billion euros forecast for 2025. In addition, the cumulative free cash flow is expected to reach over 12 billion euros, while a return on capital employed (ROCE) of around 10% is targeted. Sales forecasts indicate a slight recovery: from 65.26 billion euros in 2024 to 63.85 billion euros in 2025 and 65.65 billion euros in 2026. Earnings per share are expected to fall from 3.51 euros (2024) to 2.65 euros (2025) before recovering to 3.04 euros in 2026. These figures reflect a strategy that relies on portfolio management, capital discipline and performance culture ( Stock3 BASF forecast 2028 ).

The key growth drivers include expansion in Asia-Pacific, particularly through the new Verbund site in Zhanjiang, China, which will go into operation in 2024. With investment costs of 8.7 billion euros by 2028, this site is intended to increase capacity in one of the most dynamic markets in the world and benefit from the increasing demand for specialty chemicals. Another driver is the focus on sustainable products, supported by high R&D spending (2.1 billion euros in 2023) and a strong patent portfolio with a 42.2% sustainability focus. Segments such as Agricultural Solutions, with sales of 9.8 billion euros in 2024 and a planned partial IPO in 2027, and Environmental Catalysts and Precious Metals (ECMS), with sales of 7 billion euros in 2024, offer additional growth potential.

Another lever for the future lies in structural measures to improve results, which are expected to bring in around 400 million euros by 2028. This includes the sale of the Brazilian architectural coatings business to Sherwin-Williams for USD 1.15 billion on October 1, 2025 as well as the examination of strategic options for the vehicle and refinish coatings business (sales 2024: 3.8 billion euros). The core businesses (Chemicals, Materials, Industrial Solutions, Nutrition & Care) will contribute EUR 40.3 billion to sales in 2024 and are to be further strengthened through efficiency improvements. Investments in tangible and intangible assets were also reduced from 17 to 16 billion euros by 2028 in order to maintain capital discipline.

In order to capture the range of possible developments, three scenarios can be outlined for BASF. In the base scenario, which assumes a moderate global recovery, BASF achieves the lower target values ​​with an EBITDA of 10 billion euros by 2028. This assumes a stabilization of energy prices, a slight recovery in the automotive industry and progress in Asia. In the optimistic scenario, with strong demand in growth markets and successful implementation of sustainable innovations, EBITDA could exceed the 12 billion euro mark, supported by an increase in sales above forecasts. On the other hand, in the pessimistic scenario, characterized by ongoing geopolitical tensions, rising interest rates (forecast at 4%) and weak demand in Europe, EBITDA could remain below 9 billion euros, increasing pressure on margins and cash flows.

The dividend policy remains a stable factor for investors, with a target of at least 2.25 euros per share and a total distribution of at least 12 billion euros by 2028. A planned share buyback program of 4 billion euros from 2027, depending on cash inflows, could also support the share price. Chief Financial Officer Dirk Elvermann suggested that buybacks could be accelerated, suggesting flexible capital allocation. Nevertheless, the success of these measures depends on the ability to manage external risks such as trade conflicts or commodity price volatility.

Let's zoom in to examine BASF SE's near-term prospects over the next 6 to 12 months. During this period, the focus is on operational challenges and strategic adjustments, while analyst opinions and quarterly targets provide important clues for the chemical company's development. A close look at these factors helps assess the company's immediate direction.

For the outlook for the next 6 to 12 months, BASF remains characterized by macroeconomic uncertainties and industry-specific burdens. The board has forecast EBITDA before special items of between 7.3 and 7.7 billion euros for 2025, down from previous expectations of 8.0 to 8.4 billion euros, indicating continued pressure from weak demand in Europe and rising costs. Sales for 2025 are estimated at 63.85 billion euros, a slight decrease from 65.26 billion euros in 2024. Earnings per share are expected to be 2.65 euros, compared to 3.51 euros in 2024. These numbers indicate a phase of consolidation in which BASF focuses on cutting costs and increasing efficiency to stabilize margins.

Quarterly targets for the next two to three quarters focus on the implementation of the savings program, which aims for annual savings of 1.6 billion euros by the end of 2024. The focus is on the Ludwigshafen site, where plant closures and job cuts (at least 3,300 worldwide) are intended to reduce operating costs. After a 9% decline in operating profit to 1.8 billion euros in the second quarter of 2023 and a 2% decline in sales to 15.8 billion euros, a slight recovery is expected for the third and fourth quarters of 2024, supported by the above-expected results in the third quarter of 2023. The new Verbund site in Zhanjiang, China, which will go into operation in 2024, could also provide the first positive impulses for sales in Asia-Pacific.

Analyst opinions on BASF stock are mixed, reflecting uncertainty in the near-term horizon. Out of 30 analysts, 17 recommend a buy, 6 recommend a hold and 7 recommend a sell. The average price target is 53.04 euros, which corresponds to an upside potential of 24.74% compared to the current price. The highest price target is 63.00 euros (48.17% above the current price), the lowest is 37.37 euros (12.11% above the current price). Deutsche Bank has issued a buy recommendation, while others, as highlighted in technical analysis, advise waiting due to an unfavorable trend situation and bearish indicators (RSI < 50, stochastics < 30) ( Aktien.guide BASF price target ).

Further insights from the analyst scene show a cautious attitude. While BASF exceeded expectations in the third quarter of 2023 despite special effects, the valuation remains positive thanks to parameters such as an increase in sales of over 10%, an EBIT margin of over 10% and a return on equity of over 10%. Nevertheless, some experts warn of a continuation of weak demand in Europe and the automotive industry, which accounts for 15-20% of sales. A planned share buyback program financed by the sale of parts of the company could support the price, but technical analysis currently shows no clear bullish bias, leading to mixed recommendations ( Financial trends BASF forecast ).

BASF's short-term development depends heavily on external factors such as the stabilization of energy prices and a possible recovery in automobile production. At the same time, geopolitical tensions and trade conflicts could continue to create uncertainty that affects the order situation - which can currently only be planned a month in advance, as CFO Dirk Elvermann emphasized. The strategic direction under Markus Kamieth, who has taken over the leadership since April 2024, will be crucial to making progress in cost reduction and market expansion in Asia in the next few quarters.

Let us focus on the invisible stumbling blocks and promising paths that await BASF SE in a complex global environment. Market risks, regulatory hurdles and expansion potential form an area of ​​tension that significantly influences the strategic direction of the chemical company. A precise analysis of these aspects is essential to assess the challenges and opportunities for the company.

Market risks represent a constant threat to BASF, especially in a volatile economic environment. Fluctuating raw material and energy prices, which have been exacerbated since 2022 by geopolitical conflicts such as the Ukraine war, are putting a strain on production costs, especially at the Ludwigshafen site. Dependence on the automotive industry, which accounts for 15-20% of sales, poses further risks as demand in Europe and America continues to weaken - a 0.7% decline in order backlog in June 2024 illustrates this. In addition, trade conflicts, especially uncertainties in customs policy between the EU and the USA, lead to a cautious ordering policy on the part of customers, as CFO Dirk Elvermann emphasized. However, BASF relies on robust risk management that limits market risks and pursues a high level of diversification across asset classes, regions and sectors in order to be prepared for various scenarios ( Portfolio Institutional BASF Award ).

Regulatory hurdles make operations difficult, especially in Europe, where strict environmental regulations and bureaucratic requirements affect competitiveness. The EU requirements to reduce CO2 emissions and promote sustainable production force BASF to invest heavily in green technologies, which squeezes margins in the short term. In Germany, high energy costs and regulatory pressure are also putting a strain on production, while in other regions such as the USA or China, different standards and political uncertainties create additional complexity. These regulatory requirements require flexible adjustment of the value chain to ensure compliance while remaining competitive.

Expansion potential, however, offers BASF significant opportunities, particularly in growth markets such as Asia-Pacific. The new Verbund site in Zhanjiang, China, which will become operational in 2024, represents an investment of 8.7 billion euros by 2028 and aims to meet the increasing demand for specialty chemicals in the region. With urbanization and industrialization driving the need for materials and agricultural solutions, this location could become a key revenue driver. In addition, the strategic focus on sustainable products, supported by 42.2% of patents with a sustainability focus, shows potential to meet global trends and customer requirements. Although BASF has sold back shares in projects such as Vattenfall's Nordlicht 1 and 2 wind farms, the company remains committed as a customer of Vattenfall, underlining the importance of renewable energy to its long-term strategy ( DZ Bank Securities Vattenfall ).

The balance between market risks and expansion potential is determined by BASF's ability to overcome regulatory hurdles. While geopolitical tensions and trade conflicts could continue to threaten supply chains, the diversification of production locations – from Europe to North America to Asia – offers some insurance. The strategic focus on cost efficiency, such as through plant closures in Ludwigshafen, and investment in growth markets must go hand in hand in order to minimize risks and exploit potential.

Another aspect that deserves attention is adapting to regional differences in demand and regulatory frameworks. While Europe continues to struggle with weak demand and high costs, markets such as China could compensate through the new Verbund site and a stronger focus on specialty chemicals. How BASF manages this balance in the coming years remains a crucial factor for long-term stability and growth.