BASF Lifts Guidance and Charts Agri Spinoff, but Investors Can’t Ignore the Cash Flow Squeeze
Published on 07/18/2026 at 18:05 | Redaktion boerse-global.de
BASF’s second-quarter results served up a stark juxtaposition that left investors parsing headline euphoria from underlying financial mechanics. The Ludwigshafen-based chemicals giant swung to a net profit of €4.1bn from just €79m a year ago, powered overwhelmingly by the completion of its coatings divestment to Carlyle. That one-off book gain of €3.9bn before tax was the primary driver of the eye-popping bottom-line figure. But for all the earnings fanfare, the company’s free cash flow turned negative during the quarter, and management left its full-year cash flow target untouched, tempering any rush to buy the stock.
Revenue climbed 16% to €17.2bn in the three months to end-June, while EBITDA before special items advanced to €2.4bn from €1.6bn – handily beating the consensus estimate of €2.1bn. Bolstered by the operating momentum, BASF raised its full-year EBITDA guidance to a range of €6.9bn to €7.7bn, up from the prior band of €6.2bn to €7.0bn. Yet the cash flow forecast remained pegged at €1.5bn to €2.3bn, and the second-quarter free cash flow slipped to an estimated minus €0.2bn, reflecting higher working capital tied to rising raw material costs.
Alongside the quarterly release, BASF laid out concrete plans for the partial IPO of its Agricultural Solutions division. The company intends to legally and organizationally carve out the business unit ahead of a listing in the second quarter of 2027. The move is the latest in a string of portfolio reshuffles that has already seen the sale of the Coatings segment and underscores management’s drive to unlock value from its sprawling operations.
Should investors sell immediately? Or is it worth buying BASF?
Analyst reactions were predictably split on valuation grounds, even as most acknowledged the operational beat. On the bullish side, Goldman Sachs reiterated a “Buy” rating with a €63 price target, while Citi and Deutsche Bank also maintained “Buy” calls with targets of €58 and €60, respectively. Bernstein kept its “Outperform” rating at €61, and MWB Research went a step further by upgrading the stock from “Hold” to “Buy” with a target hike to €55. The bears were represented by Jefferies, which stuck with “Hold” at €44, and Barclays, which issued a “Sell” rating with a €40 target. The wide spread – €23 between the highest and lowest targets – reflects the uncertainty surrounding the sustainability of the earnings improvement once the coatings windfall fades and cash generation becomes the central metric.
The share price’s trajectory captured this ambivalence. Over the seven days following the announcement, BASD stock gained 2.75% to close at €48.60, suggesting some near-term optimism. But over the trailing 30 days, the shares were still down 1.67%, and they remain 11.72% below the 52-week high of €55.05 reached in April 2026. That gap highlights that while the headline numbers impressed, the unchanged cash flow outlook and the non-recurring nature of the coatings gain gave investors pause.
Operationally, BASF kept up investment momentum, commissioning a new production facility for emollient specialties in Düsseldorf. The mid-double-digit million euro plant will supply ingredients for skin and sun care products, a niche that bolsters the company’s consumer-focused portfolio.
All eyes now turn to July 29, 2026, when BASF publishes its full half-year financial report with detailed segment breakdowns. That document will provide the granularity needed to determine whether the operating improvement is broad-based or concentrated in areas that still need to prove their cash-generating ability – and whether the agri spinoff timetable can proceed without distracting from the core challenge of restoring free cash flow to positive territory.
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BASF Stock: New Analysis - 18 July
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