BASF Secures Agricultural Breakthrough with Novel Fungicide as Share Buyback Program Nears Expiry

BASF launches first HDAC inhibitor fungicide (Group 56), but shares slip 1.8% as €1.5B buyback nears end. Analysts see 23% upside, eye Q2 results amid cost pressures.

BASF has unveiled a new class of crop-protection chemistry that promises to give farmers a fresh weapon against resistant fungal diseases. The active ingredient, marketed as Adapzo Active and chemically known as flufenoxadiazam, has been classified by the Fungicide Resistance Action Committee (FRAC) into an entirely new category. As the first HDAC inhibitor to reach the market, it now stands alone in Group 56, marking the first time in years a novel mode of action has been approved for fungicides.

Yet on the trading floor, the innovation received a muted welcome. BASF shares slipped 1.81% to €48.41 on the day of the announcement, though they have since recovered marginally to €48.47. The stock now sits just below its 50-day moving average of €51.94, reflecting the broader challenge of a support mechanism that is about to disappear.

The company’s current share buyback programme — a steady source of demand for the stock — is scheduled to expire at the end of June. The tranche, with a volume of up to €1.5 billion, has seen BASF repurchase nearly 31 million of its own shares since it began, including 235,000 additional shares collected in mid-June. Those shares are being cancelled to reduce the company’s capital base. Longer term, management has committed to buying back at least €4 billion in equity by the end of 2028, on top of €8 billion in planned dividends.

Against this backdrop, analysts remain bullish. Deutsche Bank’s Virginie Boucher-Ferte reaffirmed her "buy" rating and kept her price target at €60, implying upside of more than 23% from current levels. She expects the chemicals group to report a strong second quarter, with full-year EBITDA climbing by nearly a third — a forecast slightly above consensus. The next major catalyst arrives in July, when BASF publishes its Q2 results and must back that optimism with hard numbers.

Operationally, the company is fighting a tough battle on multiple fronts. Germany’s chemical industry association VCI has described the situation as "tense," pointing to high energy costs and bureaucratic burdens that are expected to drag domestic production lower this year. BASF has responded with an aggressive cost-cutting drive: it had already saved €1.9 billion by March and is aiming to reach €2.3 billion by the end of this year. The group’s medium-term targets remain intact, with an operating result of €6.2 billion to €7.0 billion penciled in for 2026.

Year-to-date, BASF shares have gained 8.2%, while the twelve-month return stands at roughly 17%. With the buyback tap set to run dry and the agricultural division showing signs of life from the new fungicide, investors will be watching closely to see whether earnings momentum can take over as the primary driver of the stock’s performance.