The next few weeks will test BASF on two fronts simultaneously. The company’s €1.5 billion share buyback programme runs out at the end of June, removing a key lever of support for the stock just as its vast Chinese production complex near Zhanjiang begins to operate at full scale. Investors are left weighing whether the capital-return story can hold without a fresh purchase tranche, and whether the €8.7 billion bet on the Chinese market will pay off in a deeply oversupplied chemical industry.
The Zhanjiang bet begins in a hostile market
BASF officially started integrated production at Zhanjiang at the end of March. The site houses 18 plants and represents the strategic heart of the group’s expansion in Asia. Chief executive Markus Kamieth has conceded that the investment will take longer to yield returns than originally forecast. The chemical market is awash with overcapacity, margins are at historic lows, and high energy costs together with geopolitical friction are adding pressure across the sector.
BASF acknowledges the glut of capacity in many commodity chemicals. The group is banking on older, less efficient plants in other regions being shuttered over the next few years, which would gradually ease the supply pressure. In the meantime, the Zhanjiang complex is operating in a market that the German Chemical Industry Association (VCI) describes as being under “permanent stress”. The VCI offers no reliable forecast for the full year 2026, citing heavy uncertainty in raw material markets and international supply chains.
The buyback clock is ticking
The current repurchase programme, which began in November 2025 and has a volume of up to €1.5 billion, is scheduled to end this month. It represents the first tranche of a planned €4 billion in buybacks through to 2028. On 1 June BASF reported it had bought 950,000 own shares that day, bringing the total since launch to 27,835,549 shares. All repurchased shares are to be cancelled, which mechanically supports earnings per share.
The programme is part of a larger shareholder payout plan. From 2025 to 2028 BASF intends to return at least €12 billion to owners, of which roughly €8 billion is slated for dividends. The minimum annual dividend is €2.25 per share, equivalent to about €2 billion each year. Buybacks are supposed to cover the remaining €4 billion. With the first building block almost complete, the market is waiting for a concrete timetable for the next phase.
Should investors sell immediately? Or is it worth buying BASF?
Operating picture remains solid but unexciting
The buyback and payout story rests on an operating base that is resilient rather than strong. In the first quarter of 2026 revenue slipped 3.0 percent to €16 billion. EBITDA before special items came in at €2.356 billion, down from €2.5 billion in the same period a year earlier. BASF maintained its full-year target for EBITDA before special items of between €6.2 billion and €7.0 billion.
The wider industry outlook is subdued. The VCI expects chemical-pharmaceutical production to stagnate in 2026, while pure chemical output is forecast to contract by 1 percent. Falling prices could translate into a 3.5 percent revenue drop. BASF itself points to weaker chemical demand in the European Union and the United States, while Chinese growth is expected to slow but remain solid.
Analysts split on the outlook
The divergence among analysts captures the tension between capital returns and operational headwinds. Deutsche Bank rates BASF a “Buy” with a €60 target, citing an attractive valuation and buyback-driven demand. Goldman Sachs also says “Buy” and targets €65, supported by higher EBITDA estimates and confidence in cost-cutting. JP Morgan, however, rates the stock “Underweight” with a €40 target, arguing that demand visibility is poor and currency headwinds are mounting.
The share closed on Friday at €50.55, leaving it with a year-to-date gain of roughly 13 percent. It trades 3.54 percent below its 50-day moving average but 7.96 percent above its longer-term average. Should the price slip below the chart support level of €50, the 100-day moving average is seen as the next floor.
What to watch next
The immediate focus is on BASF’s capital allocation plan after June 30. The company has not yet detailed when the next buyback tranche will begin. After that, the half-year results on 30 July will reveal how far the second quarter’s margin compression has cut into profitability. Only then will investors be able to judge whether the weak chemical environment and the Zhanjiang ramp-up still leave room for the payout promises BASF has made.
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