BASF's Nanjing Electronics Plant and Chile Exit Frame a 2027 Earnings Puzzle

BASF has signed an investment agreement to build a new electronics-materials production site in China, pairing that expansion with a divestment in Chile and a fresh automotive collaboration — a trio of moves that lands just as analysts split over how durable the company's recent profitability really is.

The site, located in the Nanjing Jiangbei New Area, is scheduled to come on stream by the end of 2028. The agreement with the zone's administration was inked on November 3. Two days later, ALTA Performance Materials signed a deal to acquire BASF's Palatal business in Chile, a transaction still subject to customary closing conditions and regulatory clearances. On the product side, BASF said Monday that it had worked with Hyundai Motor Company-Kia and Alten Korea on a seating solution developed for the Kia EV3 Study Car 2.0.

Berenberg Sticks With Hold as the Bar Rises

Against that corporate activity, Berenberg analyst Sebastian Bray came away from a New York investor event with a robust picture of BASF's near-term business — but a wary eye on next year. CEO Markus Kamieth, in the analyst's reading, conveyed confidence about short-term trading. The comparison base for 2027, however, looks steep, particularly in upstream chemicals, where the question is whether wartime-inflated profitability can be matched again.

Berenberg reiterated its "Hold" rating and €51.50 price target. With the stock at €54.51, the broker's valuation sits below the current market level — a more cautious stance than the share price implies. The crux of Bray's reservation is whether earnings power can hold up under changed market conditions, not just in the current quarter.

Prices, Not Volumes, Did the Heavy Lifting

BASF's upgraded guidance rests largely on pricing. On October 28 the company raised its full-year forecast for EBITDA before special items to at least €7.4 billion, up from a prior floor of €6.9 billion — the second increase this year. The current outlook for full-year 2026 points to €7.4 billion to €7.8 billion.

The third-quarter numbers show where that support comes from. Prices rose roughly 12% year on year while volumes grew 2%, with the ramp-up of the new Zhanjiang site in China contributing to the volume gain. Pricing therefore carried far more weight than shipment growth — a strong earnings tailwind for the quarter, provided BASF can keep pushing those prices through. Whether the improvement repeats is the key test for the year ahead.

Revenue for the third quarter of 2026 came in at €16.59 billion, and adjusted EBITDA rose, according to company figures.

Agriculture Cuts a Different Figure

Not every unit is pulling in the same direction. Agricultural Solutions saw sales fall by a fifth in the third quarter and slipped into the red. A broader-based improvement would strengthen the overall picture, should the agricultural business return to a positive contribution.

Two Brokers, Two Targets

The cautious Berenberg view contrasts with a modestly more constructive call from LBBW, which on November 4 lifted its BASF price target to €57 from €56 while keeping a "Hold" rating. Neither house is urging investors to buy in size.

Fourth-quarter 2026 results are due on February 26, 2027. Until then, attention centers on whether BASF confirms the solid trading Berenberg anticipates. Beyond that, the longer-term verdict hinges on whether the company can defend its elevated profitability once wartime price support fades.