On Monday, Jefferies maintained its Underperform rating on BASF SE (BAS:GR) (OTC: OTC:BASFY) with a steady stock price target of €43.00. The assessment comes as the chemical giant prepares to disclose its first quarter results for 2024 on April 25. The firm increased its average EBITDA estimates for BASF by 2%, while keeping the price target unchanged and reiterating the Underperform rating.
Despite acknowledging early signs of improvement in certain market indicators, such as European gas and global chemical spreads, Jefferies expressed caution. The firm pointed out that the global chemical markets continue to face significant oversupply issues. These concerns are expected to limit the potential for sustainable earnings improvement for BASF.
Jefferies highlighted that while there are positive developments, the persistent oversupply in the market is likely to dampen the full extent of possible gains in BASF's financial performance. The firm's stance reflects a conservative outlook on the company's near-term prospects, despite some positive market movements.
The upcoming quarterly results from BASF will provide further insight into the company's financial health and the impact of market conditions on its performance. Investors and analysts will be watching closely to see if the early signs of improvement translate into stronger earnings for the chemical manufacturer.
Jefferies' report on BASF underscores the complexities of the global chemical industry, where supply dynamics play a critical role in shaping company outcomes. The firm's analysis indicates that while some market factors are turning favorable, overarching supply challenges remain a key consideration for BASF's performance moving forward.
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