BASF's Own Earnings Are Doing the Heavy Lifting While Evonik Plays Hard to Get

Evonik's interim chief Claus Rettig has once again turned down BASF's takeover approach, according to media reports, leaving investors to weigh a simple question: how much of the bull case actually rests on BASF's own operations? The rejection was reaffirmed yesterday, and Rettig is betting on independence, pointing to Evonik's own avenues for growth and consolidation. For anyone holding BASF, that puts the operating story front and center, with any transaction success relegated to the status of a conditional extra.

BASF shares rose 2.5% yesterday. Media reports put the company's latest offer at EUR 24 per Evonik share. With the overture rebuffed again, the discipline of any future bid becomes the yardstick — a further step would need terms that promise convincing economic value.

The EBITDA corridor is the real test

The number that matters most is EBITDA before special items. Roughly a week ago, BASF lifted its guidance for full-year 2026 to between EUR 7.4 billion and EUR 7.8 billion, up from a prior range of EUR 6.9 billion to EUR 7.7 billion. The raise followed a third quarter that came in ahead of expectations, and it now gives the valuation a concrete reference point. The more reliably BASF lands inside that corridor, the more firmly a positive view can rest on the company's own earnings power — a point that gains weight precisely because Evonik is sticking to its solo course.

Third-quarter 2026 sales reached EUR 16.4 billion, a gain of 14% on the prior-year period. EBITDA before special items for the same stretch came in at EUR 1.6 billion, 15% higher year on year, meaning the earnings metric grew slightly faster than the top line — a detail that supports the favorable reading of the sales increase.

Analysts nudge, but stay on the fence

The latest analyst move offers a mild brightening rather than a ringing endorsement. LBBW raised its BASF price target to EUR 57 from EUR 56 while keeping its rating at "Halten" (hold). That combination points to a somewhat more attractive valuation paired with a wait-and-see stance. A more convincing positive case would require BASF to back up the higher expectations with further results.

Alongside the operating picture, the buyback is already delivering a capital measure in practice. BASF reported on Monday that it repurchased 355,128 of its own shares in the period from 26 through 30 October inclusive. Cumulative purchases since 3 August totaled 7,595,230 shares through 30 October.

What could go wrong

The mirror image is a business trajectory that falls short of the raised corridor. In that case, investors would need to revisit their expectations for operating performance. The guidance hike itself raises the bar for the coming numbers, making their confirmation especially important.

On the Evonik front, the risk sits in the ongoing strategic calculation. Should BASF contemplate revised terms, their conditions and economic merit would need fresh assessment. A larger financial commitment would only convince if the expected benefit justified it. Evonik's insistence on its own growth plans sharpens that scrutiny — as long as the other side prefers independence, a successful deal should only be factored into expectations with caveats. For BASF, its own earnings development remains the more dependable valuation anchor.

The next hard data point

As long as BASF confirms the raised earnings corridor, operating strength could carry the valuation from here. Should that expectation come under pressure, the positive scenario would lose its persuasive force, and any new takeover steps would additionally need to be judged on their specific terms. The next scheduled financial date is 26 February 2027, when BASF intends to publish its fourth-quarter 2026 results. Until then, a confirmed earnings trajectory speaks in BASF's favor; changed offer conditions would call for a renewed review of the strategic opportunities and risks.