BASF’s €4.1 Billion Coatings Windfall Lifts Guidance, but Doubts Over Core Business Linger

BASF shares stagnate near €48.60 as a €3.9B coatings sale boosts Q2 profit, but analysts split on whether core chemical recovery is sustainable.

The chemical giant BASF has given investors a mixed bag of news over the past fortnight, sending its shares into a holding pattern as the market digests a massive one-off gain against a backdrop of persistent uncertainty about the underlying health of its core operations. The stock closed Friday at €48.60, down 0.42%, leaving it roughly 12% below its 52-week high of €55.05 set in April—a gap that suggests the recent flurry of announcements has yet to win over skeptics.

The headline grabber came on July 15, when BASF released preliminary second-quarter figures that smashed analyst expectations. Revenue jumped 16% to €17.2 billion, up from €14.8 billion a year earlier. EBITDA before special items surged to €2.4 billion, well ahead of both the prior-year figure of €1.6 billion and the consensus estimate of €2.1 billion. Net income attributable to shareholders hit a staggering €4.1 billion, compared with just €79 million in the same quarter of 2025. That eye-popping leap, however, was largely driven by a book gain from the sale of the company’s global automotive and industrial coatings business to US private equity firm Carlyle, which closed at the end of June and generated net proceeds of roughly €4.1 billion. The pre-tax profit on the disposal came in at around €3.9 billion.

Buoyed by the results, management raised its full-year guidance. BASF now expects EBITDA before special items of between €6.9 billion and €7.7 billion, up from a previous range of €6.2 billion to €7.0 billion. The question hanging over the stock is whether this upgrade reflects genuine operational momentum or is merely a cosmetic lift from the coatings divestiture.

That debate has split the analyst community wide open. The DZ Bank raised its price target from €63.00 to €64.00 on Tuesday, maintaining a “Buy” rating. On the other end of the spectrum, JPMorgan stuck with its “Underweight” stance and a €40.00 target, with analyst Chetan Udeshi citing low visibility on whether the positive trends can be sustained. The €24 gap between those two targets captures the full extent of the uncertainty. Deutsche Bank, meanwhile, sits in the bullish camp with a €60.00 target and a “Buy” rating, while Berenberg struck a more cautious note, cutting its target from €52.00 to €47.00 on July 16 and downgrading the stock to “Hold” on expectations of normalizing base chemical prices and demand risks in China. Bernstein, for its part, maintained an “Outperform” rating with a €61.00 target but acknowledged ongoing headwinds in the base chemicals segment.

The core tension boils down to a single question: Is the earnings improvement in BASF’s base chemicals business structural, or does it rest on a temporary price recovery that is already fading? The preliminary numbers offer little clarity on that front, and investors will have to wait until July 29, when the company publishes its full half-year financial report and holds an analyst conference, for a more detailed breakdown of how much of the profit surge came from ongoing operations versus the one-off disposal gain.

Alongside the earnings release, BASF made two other announcements that, while less dramatic, add texture to the story. The supervisory board extended the mandates of labor director and Ludwigshafen site manager Katja Scharpwinkel, as well as board member Anup Kothari, who oversees the Industrial Solutions and Surface Technologies divisions, early through to the 2030 annual general meeting. The move signals continuity at a time when the company is deep into its “Winning Ways” strategic overhaul, which included the establishment of a “Core Transformation Office” in May under Julia Raquet.

On the same day, BASF paused the planned sale of roughly 3,300 company-owned apartments at its Ludwigshafen headquarters following tenant protests. The company will continue selling individual units—around 1,100 are still on the market—but the fate of the bulk disposal remains uncertain. For investors, the housing issue is a sideshow, but it could weigh on the company’s public image at its most important site.

The stock currently trades just below its 50-day moving average and about 2% above its 200-day average—technical signals that the market has taken a wait-and-see approach. The full half-year report on July 29 will be the first real test of whether the preliminary numbers can withstand scrutiny, or whether the coatings windfall was merely a sugar coating on a less impressive operational story.