BASF SE BASFY reported strong preliminary second-quarter 2026 figures, with sales rising 16% year over year to €17.2 billion, driven by higher prices and volumes.
EBITDA before special items increased to an expected €2.4 billion from €1.6 billion a year ago. The improvement was supported by stronger earnings across most business segments, particularly Materials, Industrial Solutions and Agricultural Solutions.
BASFY Group's EBITDA is expected to reach €2 billion in the second quarter and increase significantly from €1.3 billion reported in the prior-year quarter. EBITDA was impacted by special items, primarily transformation costs related to ongoing cost-saving initiatives and the implementation of new ERP systems.
EBIT before special items also rose sharply to an expected €1.5 billion, above both the prior-year level of €0.7 billion and analysts' estimates.
Net income surged to an expected €4.1 billion compared with €79 million in the year-ago quarter, mainly driven by a €3.9 billion pre-tax gain from the completed sale of its coatings business to Carlyle. The expected tax expense associated with the transaction is a mid-triple-digit million-euro amount.
BASFY expects free cash flow of negative €0.2 billion in the second quarter of 2026 against positive €0.5 billion in the year-ago quarter, mainly due to higher working capital requirements driven by increased raw material prices. The expected free cash flow reflects estimated cash flows from operating activities of €0.5 billion, offset by capital expenditures of €0.7 billion on property, plant, equipment and intangible assets.
BASFY raised its full-year 2026 outlook for EBITDA before special items to €6.9-€7.7 billion, up from the previous forecast of €6.2-€7 billion, reflecting stronger-than-expected business performance. The company maintained its free cash flow guidance of €1.5-€2.3 billion, while noting that higher raw material prices continue to increase working capital requirements.
Per BASFY, the outlook for the global economy and regional chemical markets in the second half of 2026 remains uncertain, largely depending on the outcome of U.S.-Iran negotiations and continued access to the Strait of Hormuz. The company noted that a prolonged disruption of the trade route could hurt economic activity.
Shares of BASFY are up 10.9% over the past year against the industry’s 2.8% decline.
BASFY’s Zacks Rank & Key Picks
BASFY carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the Basic Materials space are CSW Industrials, Inc. CSW, Idaho Strategic Resources, Inc. IDR and Ternium S.A. TX. CSW, IDR and TX sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CSW’s current-year earnings stands at $12.52 per share, implying a 20.6% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 3.8%.
The Zacks Consensus Estimate for IDR’s current-year earnings is pegged at $1.52 per share, implying a 33.3% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 68.7%.
The Zacks Consensus Estimate for TX’s current-year earnings is pegged at $6.13 per share, indicating a 182.5% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, with the average surprise being 3.5%.
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BASF SE (BASFY): Free Stock Analysis Report
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