BASF has significantly lowered its earnings forecast for the financial year 2025. Instead of the originally expected range of 8.0 to 8.4 billion euros in EBITDA before special items, BASF now predicts only between 7.3 and 7.7 billion euros. This reduction of up to 900 million euros reflects the ongoing challenges due to a weakening global economy, geopolitical uncertainties, and new U.S. tariffs. The economic situation in Germany is also placing significant pressure on the chemical giant.
The Economic Situation and Its Impact
In the second quarter, BASF was able to meet analyst consensus with an operating result (EBITDA) of around 1.77 billion euros; however, EBIT was significantly below expectations at roughly 0.49 billion euros. The company continues to expect a difficult environment with weaker global GDP growth, stagnant industrial production, and declining margins in the upstream business.
Market Reactions and Analyst Assessment
This earnings warning is an important warning signal for investors: it highlights potential risks and a deterioration in the company’s performance in the ongoing year. Market reactions were notable – the stock price fell by about -2.69% to around 42.71 euros after the announcement. Nevertheless, analysts still see a moderate price potential of nearly 14% with an average price target of approximately 49.25 euros, though recommendations are mixed: some advise buying or holding the stock; a few recommend selling.
Additionally, BASF’s earnings warning also highlights industry-specific problems: similar forecast reductions were recently reported by the chemical company Covestro due to the same macroeconomic pressures and generally weak economic conditions.
Conclusion: BASF’s reduction of the earnings forecast is a clear warning signal for investors regarding current risks in the chemical sector and potential challenges for the company this year. Therefore, a cautious evaluation of the stock considering the difficult economic environment appears advisable.