BASF's Buyback Is Already Done — Its Evonik Ambitions Are Still Just Paper

BASF has been quietly buying back its own stock for weeks, but the far bigger question of how it might fund a multi-billion-euro Evonik acquisition remains unanswered. That contrast — completed capital returns on one side, an unconfirmed mega-deal on the other — is the lens through which investors should read the chemicals giant's third-quarter results, due at 7:00 a.m. on October 28, 2026.

The distinction matters more than it might appear. The buyback programme, which began on August 3, is a done deed, documented in a capital-market disclosure published yesterday covering purchases made last week. The Evonik situation is not. Bloomberg reported that BASF raised its potential offer to roughly EUR 24 per Evonik share last week, implying a transaction value above EUR 11 billion. Neither company has confirmed those terms, and no formal negotiations have taken place. Reuters, citing two people familiar with the matter, reported the same EUR 24 figure on Friday; Evonik and the RAG-Stiftung declined to comment.

Two Clocks Running at Different Speeds

Because the buyback is already in motion while the takeover remains speculative, no binding conclusion about future capital allocation can be drawn from the deal reports alone. What investors can do is weigh the reported price against the financial room BASF actually has — and that is where the quarterly report comes in.

Analysts polled ahead of the release expect revenue of about EUR 15.7 billion and adjusted EBITDA of just under EUR 1.5 billion for the quarter. Those are estimates, not reported figures. Revenue alone would prove little; the real test is whether BASF can convert that top line into operating profit, since that is precisely where the quarterly numbers meet the full-year guidance.

For 2026, BASF targets EBITDA before special items of EUR 6.9 billion to EUR 7.7 billion, alongside free cash flow of EUR 1.5 billion to EUR 2.3 billion. Debt of roughly EUR 17 billion is also cited. Against that backdrop, free cash flow carries outsized weight: a positive inflow would widen the room for a possible acquisition, while the earnings forecast on its own says nothing about it.

Deutsche Bank Steps Back

The cautious tone from Deutsche Bank Research fits the uncertainty. Yesterday the broker downgraded BASF from "Buy" to "Hold" and cut its price target to EUR 53 from EUR 60. Analyst Virginie Boucher-Ferte pointed to the ambiguity surrounding the intended takeover.

Her verdict is not a rejection of the strategic logic. Over the long run, a purchase could make sense both strategically and financially. A deal of this size, however, brings considerable complexity and execution risk. BASF has flagged potential synergies in precursors, procurement, infrastructure and research, but has not quantified them — leaving investors without a figure against which to judge the reported purchase price.

There is another complication: Evonik's own interest in Ashland, a move BASF reportedly views as risky. And a confirmed higher offer does not exist in public.

What Would Make the Bull Case Hold

In the optimistic scenario, BASF meets operating expectations and backs its annual targets with a convincing trading performance, so that confidence rests on more than the business profile and past debt reduction. Confirmation of the cash flow goal would then matter as much as the operating result, and it could take some heat out of the Evonik debate — stable numbers would not eliminate execution risk, but they would support the case that BASF is pursuing its strategic plans from a position of operating strength.

The bear case is equally clear. Weaker results could call the annual targets into question, while a possible takeover would absorb both attention and financial resources. A softer operating picture combined with a higher offer price would be more damaging than either factor alone.

Investors should also keep two dates apart. Tomorrow's release is a confirmed event; a decision on Evonik is not. The key items to watch are the operating result, the commentary on full-year guidance and the scope for financial manoeuvre. Fresh Evonik headlines may add colour — but they will not settle the question.