Our Long-Term Outlook for BASF Remains Solid Despite Near-Term Macroeconomic Challenges

BASF posted a decent fiscal 2022, as the firm grappled with myriad macroeconomic headwinds including input cost inflation and reduced product demand around the world. Though some of the current market dynamics will likely persist in 2023, we expect much of these challenges will abate in the long run, especially as BASF makes headway on several initiatives targeting operational efficiency gains. We’re therefore raising our fair value estimate to EUR 65 ($17) from EUR 59 ($15), mostly due to our improved outlook for the firm’s profitability over the next five years. We maintain our narrow moat rating and stable moat trend following results.