BASF: Berenberg reduces target price

(CercleFinance.com) - Berenberg announced on Friday that it had reduced its price target for BASF shares from E58 to E54, explaining that it expects the business recovery to take longer than expected.


The analyst - who has a buy recommendation on the stock - believes that the scenario of increased capacity utilisation in the chemicals sector, synonymous with improved prices and margins, could take longer than anticipated.

Despite the disappointing PMI indices published in June, Berenberg remains comfortable with its Buy recommendation on the stock, thanks to the favourable trajectory of volumes and the downturn in LNG prices, against a backdrop of more abundant supply.

According to his calculations, a return of electricity prices to the lower end of a range of E25 to E35 per Mwh could enable BASF to reduce its energy bill by E250m, an amount he expects to increase between now and 2026.


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