BASF Trims Harbour Stake to 16.4% While Betting on LNG Licensing and a Raised Guidance

BASF sold 133 million Harbour Energy shares at GBP 2.66, cutting its stake to 16.4%, as investors weigh its raised 2026 guidance and buyback.

BASF has continued its gradual retreat from oil and gas, offloading roughly 133 million ordinary shares in Harbour Energy at GBP 2.66 apiece. The placement, first reported by Reuters, will cut the Ludwigshafen-based chemicals group's holding from about 24.3% to 16.4%. Of the block, 80 million shares went to institutional investors, while Harbour Energy itself repurchased the remaining 53 million.

The move extends a divestment drive BASF has pursued for months, steadily drawing capital out of the upstream business that once formed part of its oil and gas arm. For shareholders, the proceeds matter chiefly in the context of the group's existing capital-return efforts, including a buyback program that began in early August and was reconfirmed with a fresh interim update last Friday.

Technology Licensing Gains Traction

While streamlining its portfolio, BASF is pushing ahead on the industrial process-technology front. The company said Cheniere Energy has commissioned its Durasorb LNG MAX technology at the Corpus Christi LNG site in Texas. Installation has been underway since 2025 and is slated for completion across the site's remaining liquefaction trains by the end of 2027. Licensing and technology deals of this kind generate high-margin revenue that is largely insulated from the swings of the cyclical chemicals markets.

Back at its headquarters, BASF is also investing in core production: in early September, a fundamentally modernized plant for manufacturing acid chlorides and chloroformates came on stream in Ludwigshafen. Together, the two announcements underscore that BASF is not relying on portfolio cleanup alone — it is putting money to work operationally alongside buybacks and stake sales.

Shares Under Pressure

The recent news flow has done little to lift the stock. At Friday's close, the shares stood at EUR 52.12, down 2.1% from the prior day. That leaves the price some distance below its 52-week high of EUR 55.05 set in April — roughly 5% below — though still well above last October's low. Over seven days, the stock is down 2.4%.

No single trigger explains the recent softness. Market watchers attribute the move more to profit-taking across the chemicals sector, after many names had benefited from a special boost tied to the Middle East conflict. On the charts, the price slipped below its short-term support around EUR 52, a level whose breach highlights how sensitively the market reacts to any sign of weakening.

The Guidance Question

With the share price retreating, attention shifts to a different matter: can BASF actually deliver on the annual forecast it raised over the summer? In July, the group released preliminary second-quarter figures — a 16% revenue increase to EUR 17.2 billion and adjusted EBITDA of EUR 2.4 billion, comfortably beating the analyst consensus of EUR 2.1 billion. The full-year outlook was lifted accordingly, to EUR 6.9 billion to EUR 7.7 billion in EBITDA before special items, up from a prior EUR 6.2 billion to EUR 7.0 billion. After weak demand in the first quarter, when both revenue and EBITDA declined, the revision looked like confirmation of a turnaround.

The sticking point lies in BASF's own assumptions. Alongside the higher guidance, the company trimmed its macroeconomic expectations for 2026 — GDP growth to 2.5% from 2.7%, chemicals production to 1.8% from 2.4% — citing uncertainty surrounding the Middle East conflict and the Strait of Hormuz. Two opposing signals thus collide: a higher earnings expectation set against a more cautious view of the economy. Whether that contradiction resolves will largely determine whether the guidance holds through year-end.

The German chemical industry association offers a sober frame. Its president, Markus Steilemann, described the situation as a "breather, not a trend reversal," noting that the uptick stems mainly from customers building inventories out of fear of supply bottlenecks — not from genuine demand strength. Industry production in the first half ran about 3% below the prior-year level, while revenue slipped 1% to EUR 106 billion.

Bull and Bear Cases

Should the Middle East special effect last longer than expected, or demand normalize organically, BASF could reach the upper end of its raised guidance. The capital side adds tailwind: the ongoing buyback of up to EUR 1 billion, launched in August, signals management's confidence in its own valuation. Operationally, too, things are moving — the new Durasorb LNG technology is now running at several Cheniere Energy liquefaction trains, with further stages due by the end of 2027. If the combination of cost discipline, the special situation and capital returns proves durable, the stock has room to move back toward its 52-week high of EUR 55.05.

If the special effect fades, however, management's own cautious macro assumptions could become reality. The industry association's warning of a mere "breather" carries weight, since it describes precisely the inventory-building dynamic that likely also propped up BASF's Q2 numbers. Should that special boost disappear without genuine end-demand stepping in, the upper end of the guidance range would become unrealistic. Jefferies analyst Marcus Dunford-Castro had already cut his price target to EUR 44 in late June — before the guidance hike — warning against overly optimistic second-half expectations; that call is now older than typically reliable, but it marks the core of the risk.

What to Watch

As long as the Middle East-driven special situation does not abruptly unwind and BASF keeps benefiting from its buyback, the raised guidance remains a plausible scenario. But if the inventory dynamic described by the industry association tips over without structural demand following, the earnings picture could cloud again quickly. The next concrete test comes on October 28, with the conference call on third-quarter figures — that is where it will become clear whether the summer surge had staying power or was indeed just a breather.