BASF’s €1.5bn Buyback Faces Market Skepticism as Shares Shed Gains

BASF shares slip 1.89% as buyback fails to offset weak demand and mixed Q1 results. RSI overbought, stock below 52-week high. Full-year guidance steady.

BASF’s shares have been struggling to hold onto intraday advances, even as the chemical giant ploughs ahead with its billion-euro share repurchase program. The stock closed at €51.32 on Tuesday after giving up a session high of €51.63, and fell a further 1.89% the next day to €50.35. The pattern suggests that while the buyback offers mechanical support, underlying headwinds are keeping investors from chasing the rally.

Repurchase Hits Milestone Pace

The company snapped up 1.57 million of its own shares in the week through May 22, 2026, bringing the total accumulated since November 2025 to nearly 27 million. This marks the penultimate push toward the first tranche target of €1.5 billion, which BASF expects to complete by the end of June. The longer-term plan calls for €4 billion in buybacks by 2028, contributing to a total capital return — including dividends — of roughly €12 billion. All repurchased shares are cancelled, tightening the supply and providing technical underpinning for the price as long as the program runs.

Mixed Earnings Paint Unclear Picture

First-quarter results released earlier this year reveal a company moving in opposite directions. Revenue slipped to €16.0 billion from €16.5 billion a year earlier, while EBITDA before special items fell €140 million to €2.36 billion, dragging the margin down to 14.7% from 15.1%. Yet net income jumped to €927 million from €808 million, pushing earnings per share to €1.06 versus €0.91. The improvement in the bottom line failed to generate sustained buying interest, and the shares have lost roughly 5% over the past 30 days despite a 20% gain on a 12-month basis.

Management held its full-year forecast steady, projecting EBITDA before special items of €6.2 billion to €7.0 billion and free cash flow of €1.5 billion to €2.3 billion. However, the company acknowledged that its assumptions for global economic growth may prove too optimistic, a risk amplified by persistent currency headwinds, pricing pressure, and weak chemical demand.

Restructuring Funds the Repurchase

The cash for the buyback is being raised through portfolio moves rather than operations. BASF is selling its Coatings division to private equity firm Carlyle, retaining a 40% stake, with completion expected in the second quarter of 2026. A separate initial public offering of the agricultural solutions business on the Frankfurt Stock Exchange is slated for 2027. Meanwhile, the “CoreShift” cost-cutting program aims to reduce annual fixed expenses by €2.3 billion through job cuts and process streamlining, freeing up additional resources for shareholder returns.

Technically, the stock’s relative strength index sits at 78.7, well into overbought territory. While the price remains about 8% above its 200-day moving average — a sign the medium-term trend is intact — it also trades roughly 6% below its 52-week high of €54.70, indicating that the upward momentum has stalled.

The immediate test will come before July, when BASF must finish acquiring the last shares of its inaugural buyback tranche. Whether the Coatings sale closes in time to provide the necessary liquidity remains uncertain, as regulatory approvals are still pending. If it goes through, the company will be well positioned for the next phase of its capital return strategy — but for now, the market appears to be waiting for clearer signs of operational recovery.