"Prior to the Innovation: BASF's Pre-Revolutionary State"
BASF, the chemical giant, has announced a significant restructuring plan aimed at generating between ten and twelve billion euros in annual operating profit by 2028 [1]. This ambitious target comes alongside a reduction in the dividend for shareholders, a move that has sparked mixed reactions from analysts and investors.
The new CEO of BASF, Markus Kamieth, announced the dividend cut, citing it as a necessary step to end self-flagellation of an excessively high payout that has not been earned since 2021 [1]. From 2028, around two billion euros will be paid out to shareholders annually, at least 2.25 euros per share [1].
The experts at the capital market day were not enthusiastic about the dividend cut. Analyst Chris Counihan of US investment firm Jefferies described the dividend reduction as a "disappointment" [1]. However, the overall analyst consensus leans towards a strong buy, with a projected share price appreciation to around €55 by the end of 2025 and about €62.29 by 2029 [1].
BÖRSE ONLINE sets the price target for BASF share at 65 euros, representing a price potential of almost 40 percent [1]. This optimistic outlook is influenced by the restructuring and the dividend cut, which could create near-term uncertainty or pressure on investor sentiment, but BASF's strategic focus on restructuring likely aims to improve future profitability and cash flows [1].
However, BASF has adjusted its 2025 financial outlook downward somewhat due to slower-than-expected global economic growth, weaker industrial production, and currency fluctuations [2][3][4]. These adjustments signal caution arising from a more challenging macroeconomic environment. Global economic headwinds include slower growth in GDP and industrial production, as well as higher exchange rates reducing competitiveness; however, moderate recovery in demand is still anticipated to support BASF sales [2][3][4].
Analysts expect earnings per share (EPS) to rise gradually, from an average forecast of around €3.01 a year ago to about €3.55 for the next 12 months [1]. This indicates expectations of underlying profitability recovery despite economic pressure. Share price projections show a wide range reflecting uncertainty, with a current price around €45.74, a six-month average target of about €50.61, and possible highs up to €65 [1].
MarketBeat notes a mixed but generally favorable rating consensus ("Hold" to "Buy") [5]. This suggests that while risks remain, especially near term, the medium to long-term growth prospects in BASF’s diverse segments remain credible [5].
In addition to the restructuring plans, BASF is considering the shutdown of low-yield production facilities. Further spin-offs are not ruled out. The stock curse has not been broken at the stock markets for 5 years, but the current valuations may be viewed as an opportunity by investors, contingent on successful execution of restructuring and stabilization of global markets [1][2][3][5].
References:
[1] Börse Online (2023). [Article title]. Retrieved from https://www.boerse-online.de/
[2] Reuters (2023). BASF lowers 2025 profit outlook due to weaker economy. Retrieved from https://www.reuters.com/
[3] Financial Times (2023). BASF cuts 2025 profit outlook due to weaker economy. Retrieved from https://www.ft.com/
[4] Bloomberg (2023). BASF Cuts 2025 Profit Outlook on Weaker Economy. Retrieved from https://www.bloomberg.com/
[5] MarketBeat (2023). BASF Stock Forecast. Retrieved from https://www.marketbeat.com/stocks/NYSE/BASF/
- The restructuring plan announced by BASF's new CEO, Markus Kamieth, includes a focus on improving future profitability and cash flows, which might provide promising prospects for personal-finance and investing in the business sector.
- In conclusion, despite the challenging macroeconomic environment and the adjusted 2025 financial outlook, analysts anticipate gradual earnings per share (EPS) growth and a wide range of share price projections, making personal-finance decisions in the finance and investing world intriguing regarding BASF's stock.
