Berenberg has changed its recommendation on BASF SE, moving the stock from a "sell" to a "hold" rating and raising its price target on the Frankfurt-listed shares to €48 from €38. The firm also lifted its target for the U.S. ADR to $14.20 from $11. The brokerage said the upgrade reflects a shift in Europe’s policy backdrop for chemicals that has overtaken the earnings-momentum bear case it had previously applied.
The shares were quoted at €50.76 at the close of XETRA trading on Feb. 16, placing the company’s market capitalisation at about €45.1 billion, and trading above Berenberg’s new target. Berenberg notes BASF now trades at roughly 9x expected 2026 EV/EBITDA, versus a long-run average in the region of 7x.
Berenberg’s initial sell recommendation, set out in October 2025, rested on a clear earnings-momentum argument: ongoing oversupply in chemicals markets, notably from Chinese producers, would depress consensus estimates and pressure the share price. In the months after that downgrade, consensus 2026 EPS forecasts fell by roughly 15 percent. Despite that decline in consensus forecasts, BASF shares have rerated substantially higher.
“Remaining bearish purely on valuation grounds strikes us as unnecessarily stubborn when our 2026 EPS forecasts are not much different from consensus,” analyst Sebastian Bray, CFA, said in explaining the change in stance.
Berenberg identifies three political developments as central to its reassessment. First, on Feb. 5 the European Commission imposed provisional anti-dumping duties on imports of 1,4-butanediol, covering shipments from China, Saudi Arabia and the United States under Commission Implementing Regulation (EU) 2026/270. The duties followed a petition by INEOS filed in April 2025. The measures impose duties on Chinese producers in a range from 105.6 percent to 113.7 percent and on U.S. producers in a range from 135.7 percent to 142.5 percent.
Second, China has ended VAT rebating for several categories of chemicals, a policy change Berenberg highlights although it notes that items such as PVC and silicones are of less direct relevance to BASF’s portfolio.
Third, discussions have intensified in Europe about delaying planned reductions in free allowances under the EU Emissions Trading System. German chancellor-elect Friedrich Merz publicly addressed potential changes ahead of an EU meeting on Feb. 12, before subsequently moderating his position. Berenberg quantifies the potential value: if BASF’s free carbon allowances were fully shielded from withdrawal into the 2030s, the implicit savings at a carbon price of €100 per tonne would be in the order of €300 million to €400 million.
The brokerage adds that even treating that potential saving conservatively - by capitalising it at a sector-style 2030 EV/EBITDA multiple of 4x - would still be substantially lower than the around €4 billion in market capitalisation the sector has added since early February, suggesting investors may be pricing in the prospect of further EU support.
Changes to Berenberg’s financial estimates were modest. The 2026 adjusted EPS forecast now stands at €2.66 after a 0.2 percent upward revision. The 2027 EPS view was trimmed by 2.9 percent to €3.07, largely reflecting offsetting foreign-exchange headwinds and higher prices for platinum group metals. Ahead of BASF’s FY25 earnings release on Feb. 27, Berenberg anticipates that the company will guide to FY26 EBITDA of approximately €6.7 billion to €7.2 billion.
In sum, the brokerage has shifted its stance because recent policy developments have reduced the weight of its prior bearish thesis based on oversupply and earnings momentum. Its estimate revisions remain limited, but the changed regulatory and political landscape in Europe has prompted Berenberg to lift ratings and targets for BASF.