BASF BAS.DE
What does BASF do?
BASF is one of the world's largest chemical companies, headquartered in Ludwigshafen. The company operates one of the largest integrated chemical sites in the world, where production plants are linked through energy and material flows. This Verbund system is intended to reduce costs and use resources efficiently.
The business is divided into six segments: Chemicals (petrochemicals and intermediates), Materials (including isocyanates, polyamides and specialties for plastics processing), Industrial Solutions (additives, dispersions, resins), Surface Technologies (including catalysts and battery materials), Nutrition & Care, and Agricultural Solutions (crop protection and seeds). Customers come from automotive, construction, agriculture, consumer goods and electronics, among other sectors. BASF competes with other large groups as well as specialized providers, where size, integrated structure and broad positioning shape its position, while site costs in Europe can be a structural disadvantage.
Score profile
Rank vs. Basic Materials (88 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, BASF ranks below average in the group Basic Materials (3.9/10). On growth, the company ranks in the middle in the group Basic Materials (4.4/10). On valuation (higher = cheaper), the stock ranks above average in the group Basic Materials (6.2/10). On financial strength, BASF ranks in the middle in the group Basic Materials (5.6/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 17.8x | 15.2x | better than 34 % |
| Trailing P/E | 24.2x | 22.9x | better than 44 % |
| PEG ratio | 0.6x | 1.8x | better than 92 % |
| EV/EBITDA | 10.5x | 10.7x | better than 52 % |
| Price/sales | 0.8x | 1.3x | better than 71 % |
| Price/book | 1.3x | 2.0x | better than 78 % |
| Revenue growth | 14.2% | 9.3% | better than 69 % |
| Earnings growth | -5.3% | 0.0% | better than 20 % |
| Gross margin | 23.4% | 26.0% | better than 43 % |
| Operating margin | -0.8% | 11.7% | better than 6 % |
| Net margin | 9.1% | 4.9% | better than 68 % |
| Return on equity | 6.1% | 8.3% | better than 38 % |
| Debt/equity | 59.9% | 56.4% | better than 44 % |
| Current ratio | 1.9x | 2.1x | better than 47 % |
| Free cash flow yield | 6.3% | 3.1% | better than 77 % |
| Dividend yield | 4.1% | 1.6% | – |
| Payout ratio | 93.8% | 34.5% | – |
| Beta | 0.76 | 1.03 | – |
Valuation: what is BASF worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give BASF a model range of 46.53 EUR to 129.00 EUR per share.
18 analysts, average rating “Buy”, average price target 53.36 EUR (−2.2%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Demand from cyclical customer industries such as automotive, construction and industry largely determines sales volumes and plant utilization.
- The spread between selling prices and raw material and energy costs, especially for natural gas and crude oil, shapes profitability.
- The specialty chemicals and agricultural products businesses provide more stable earnings than the more economically sensitive basic chemicals.
Risks
- High energy and regulatory costs in Europe may weaken competitiveness against producers in Asia and the US.
- Economic weakness and overcapacity, particularly in China, put pressure on prices and margins in basic chemicals.
- Environmental, liability and safety risks as well as stricter climate requirements call for high investment and may lead to litigation.
What to look for with BASF
Adjusted operating earnings (EBITDA) relative to revenue show how well the company absorbs price and cost fluctuations in the cyclical chemicals business.