BASF's Coatings Windfall Fuels a €1 Billion Buyback and a Sharper 2026 Outlook
Published on 08/07/2026 at 15:22 | Redaktion boerse-global.de
The numbers landing on investors' desks from Ludwigshafen this week tell a story of a company in transition — one where a blockbuster asset sale is quietly funding a more aggressive return of capital, even as the core chemicals business shows genuine, if less flashy, operational momentum.
BASF's second-quarter report, released on July 29, delivered a headline-grabbing surge in net profit to €4.2 billion, up from just €108 million in the same period last year. The leap, however, owes its scale to a one-off event: the completion of the sale of a 60 percent stake in its automotive and refinish coatings business to US private equity firm Carlyle Group. The transaction, closed on June 30, generated a pre-tax gain of €3.9 billion, with an expected tax burden in the mid-hundreds of millions of euros. After taxes, the windfall contributed €3.5 billion to the bottom line.
Strip that out, and the underlying picture remains constructive, if more measured. Group revenue climbed 16 percent to €17.2 billion, up from €14.8 billion a year earlier, propelled by an 11.5 percent increase in prices and a 7.3 percent gain in volumes. Earnings before interest, taxes, depreciation and amortization, adjusted for special items, rose by €854 million to €2.4 billion — a figure that came in comfortably ahead of analyst consensus.
Restructuring on this scale brings operational risk — and the same is true in your own workplace. As BASF's experience shows, major change demands rigorous oversight. A free toolkit with 41 ready-to-use templates and checklists helps you document and manage workplace risks properly, keeping your team safe and your business compliant. Download the free Risk Assessment Toolkit
Guidance Raised as Restructuring Pays Off
That better-than-expected performance prompted management to lift its full-year outlook. BASF now expects adjusted EBITDA of between €6.9 billion and €7.7 billion for 2026, a meaningful upgrade from the previous range of €6.2 billion to €7.0 billion. The company left its free cash flow guidance — €1.5 billion to €2.3 billion — and its CO? emissions target of 17.2 to 18.2 million tonnes unchanged.
CEO Markus Kamieth framed the results as evidence that the cost-cutting programme launched in 2024 is delivering. Lower expenses, reduced capital expenditure and improved plant utilisation are all feeding through to the bottom line. Of the €2.3 billion in annual savings targeted by the end of 2026, roughly €2 billion had been realised by the end of June, according to the chief executive.
The human cost of that efficiency drive remains steep. Since January 2024, BASF has eliminated around 7,000 positions worldwide, with more jobs cut in the first half of this year than in the previous two years combined. At the company's Ludwigshafen headquarters, the number of full-time roles dipped below 30,000 in May for the first time since 1954. The site's competitive position has nonetheless improved: the share of highly competitive production units there has risen from 78 percent to 88 percent since 2024.
Buyback Mechanics and a Balance Sheet in Repair
Alongside the results, the board unveiled a fresh share repurchase programme of up to €1 billion, slated to begin in August and run through the end of April 2027. The company plans to cancel all 31,600,261 shares bought back — equivalent to roughly 3.5 percent of share capital at the time of the announcement. The new programme forms part of a larger €4 billion buyback scheme announced in September 2024, which is scheduled to run until the end of 2028. Between November 2025 and June 2026, BASF had already repurchased and cancelled shares worth approximately €1.5 billion.
The proceeds from the coatings sale are also being deployed to strengthen the balance sheet. The transaction brought in €5.6 billion in purchase price payments, supplemented by €522 million from the sale of shares in Harbour Energy. That pushed cash flow from investing activities to €5.5 billion in the second quarter, a dramatic swing from the minus €1.1 billion recorded a year earlier. Operating free cash flow, however, remained in negative territory at minus €189 million, some €721 million below the prior-year quarter.
In the third quarter, BASF plans to repay bonds and loans with a nominal volume of €1.6 billion ahead of schedule, a move designed to reduce its net leverage. The company continues to target a single-A credit rating; Fitch, Moody's and S&P all currently assess the group in the A range with stable outlooks.
Analysts Split on the Stock's Trajectory
The investment community's reaction to the numbers was notably divided. UBS analyst Christian Bell raised his price target from €52 to €55 on July 31, keeping a Neutral rating and citing demand stability expected to persist into the second half. Berenberg's Sebastian Bray also lifted his target, from €47 to €50, while maintaining a Hold — though he cautioned that the shares remain more sensitive to macroeconomic conditions than to company-specific developments.
JPMorgan struck a far more cautious tone. Analyst Chetan Udeshi retained an Underweight rating with a price target of €40, well below the current trading level, pointing out that the second-quarter results benefited from special effects.
Whatever the market's verdict, companies that operate heavy industrial sites know that safety documentation is never optional. The free Health & Safety Toolkit provides risk assessments, checklists and toolbox talks aligned with UK regulations like COSHH and PUWER — everything you need to protect employees and visitors. Get the free Health & Safety Toolkit
The market's verdict so far has been moderately positive. The stock closed at €50.88 on Thursday, up 0.32 percent, and has gained 6.78 percent over the past 30 days. It currently trades at €51.29, having advanced 15.44 percent since the start of the year. That leaves the shares roughly 6.8 percent shy of the 52-week high of €55.05 reached in April. The DZ Bank, for its part, reaffirmed its Buy recommendation on July 30 and nudged its price target up from €63 to €64.
Investors won't have to wait long for the next data point: BASF is scheduled to publish its third-quarter figures on October 27.
