Stock of BASF declines following shareholder communication about jobs - next steps?
Bashed BASF Shares at the Exchange on Monday Over This Crummy News. But What Went Wrong for the DAX Company? And What's on the Horizon for Shareholders?
BASF shares kicked off the new trading week on a dismal note on Monday. The DAX company took a beating due to unfortunate news dropped on Friday evening, when management was compelled to divulge more lousy tidings.
Unfortunate News for BASF Owners
Specifically, write-offs on battery materials in the Surface Technologies segment and unanticipated restructuring costs have weighed down the company over the past year. Consequently, earnings before interest and taxes (EBIT) plummeted to 2.0 billion euros, missing the analyst prediction of 3.2 billion euros.
Preliminary figures suggest that revenue in the business year will also dwindle from 68.9 billion euros to an estimated 65.3 billion euros.
Despite these figures, analyst firm Jeffries remains bullish on the company, retaining its buy rating and price target of 56 euros. The firm attributed the company's EBITDA, which stood at 7.9 billion euros, hitting expectations, as the primary reason.
BASF Shares Slump - So What's Next?
Still, shareholders responded negatively on Monday, pushing the stock down as much as three percent at one point. This puts the recently reclaimed 200-day line at 45.32 euros at risk, which could end the uptrend since mid-January if it collapses below support.
Analysts remain bullish on the stock in the medium to long term, with the consensus promising a 15 percent upside (price target of 54.59 euros) and recommending a buy. BÖRSE ONLINE is similarly optimistic, with a buy recommendation and a price target of 61.80 euros.
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Disclosure of Potential Conflict of InterestThe publisher Börsenmedien AG's management and majority shareholder, Mr. Bernd Förtsch, directly and indirectly holds positions in the following financial instruments mentioned in the publication, which may profit from the potential price movement resulting from the publication: BASF.
- The unexpected write-offs on battery materials and unrevealed restructuring costs have affected BASF's financial performance, causing a decline in earnings before interest and taxes (EBIT) and potentially affecting revenue as well.
- Despite the disappointing EBIT results, the analyst firm Jeffries remains optimistic about the company, retaining its buy rating and price target of 56 euros due to the company's EBITDA, which met expectations.
- Shareholders reacted negatively on Monday, pushing the stock down by three percent in some instances, potentially putting the recently reclaimed 200-day line at risk, and ending the uptrend since mid-January if it collapses below support. However, analysts continue to hold a positive view on the stock in the medium to long term, with potential price upsides and recommendation to buy.
