PARIS (dpa-AFX) - The French bank Societe Generale is counting on a more radical approach at BASF under the next CEO Markus Kamieth. The situation at the chemical company is not sustainable, as the latest results show that it has reached the level of 2009, while the many structural challenges continue. In anticipation of better times ahead, the shares were upgraded from "hold" to "buy" in a study published on Tuesday.

Analyst Peter Clark was optimistic that there were already encouraging signs of change ahead of the change of CEO in April. He expects a stronger focus on costs and cash, more far-reaching restructuring, a reduced investment budget and progress in exiting the oil and gas business. Added to this is the planned separation of activities that are not part of BASF's Verbund structure. Points which, in his opinion, will enable the necessary radical change.

As Clark explained in more detail, the share price has almost halved since the last change of CEO to Martin Brudermüller in May 2018. Measured against the current earnings situation, the valuation is below the historical average. The expert believes that much of the bad news has already been priced in. In contrast, little value is placed on a cyclical upturn or BASF's considerable restructuring potential.

Clark raised the price target from 45 to 54 euros, which corresponds to an increase of almost 18 percent at the current level. According to the "Buy" rating, the analysts at Societe Generale expect BASF shares to show an absolute gain (share price performance + dividend) of at least 15 percent over the next twelve months./ajx/la/tih/bek/jha/

Analyzing institute Societe Generale S.A.

Publication of the original study: 13.02.2024 / 11:17 / CET

First dissemination of the original study: 13.02.2024 / 17:35 / CET