BASF SE: 1Q26 Preview — What is the FY26 EBITDA Upside?
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UBS released a first-quarter 2026 preview for BASF, maintaining a Neutral rating while raising the 12-month target price to EUR 52 from EUR 47. The investment bank forecasts first-quarter EBITDA of EUR 2,072 million, representing a 17% year-on-year decline and falling 3% below market consensus. Furthermore, UBS projects full-year 2026 EBITDA at EUR 6,479 million, which sits 6% below consensus and remains at the lower end of the company’s own guidance range of EUR 6.2 billion to EUR 7.0 billion.
A central theme of the report is the impact of the Middle East conflict on the chemical giant's profitability. UBS observes that surging energy and raw material costs have driven the chemical price index up approximately 60% year-on-year, with naphtha prices jumping 120%. While BASF can offset rising upstream costs through price increases, historical data suggests that such aggressive pricing inevitably triggers mid-term volume pressures. Therefore, UBS views the current high-price environment as a net negative for BASF's medium-term growth.
Management is not expected to revise its full-year 2026 EBITDA guidance when reporting first-quarter results on April 30. From a valuation perspective, the stock currently trades at 10.2x EV/EBITDA, representing a 43% premium over its normalized multiple of 7.1x. UBS warns this elevated pricing reflects overly optimistic market expectations. The revised target price is based on an average of discounted cash flow and sum-of-the-parts valuations.