BASF’s Q2 EPS, EBIT to be ahead of market consensus - analyst

09 July 2012 10:37  [Source: ICIS news]

LONDON (ICIS)--Bernstein Research is expecting BASF to report second-quarter earnings per share (EPS) and earnings before interest and tax (EBIT) ahead of market consensus, the global analyst said on Monday.

The analyst has forecast the improved earnings driven predominantly by a better quarter from the Germany-based major's chemicals and plastics segments and a strong quarter from its agricultural solutions business.

“For the group [BASF], our Q2:12 adjusted EPS of €1.67 is 5% ahead of consensus, and group EBIT (ex. specials) [excluding special items] of €2,453m is 4% ahead of consensus' estimates,” it said.

Bernstein Research added that overall industry data suggests that margins are holding because of price stability and easing costs, and that volumes remain stable.

BASF’s chemicals segment is expected to report EBIT (excluding special items) of €586m for the second quarter, 13% ahead of consensus expectations, while the plastics segment’s EBIT (excluding special items) will be €318m ($388m), 17% ahead of consensus expectations, according to the analyst.

“Falling oil prices have in general meant increasing margins for petrochemicals products, with European naphtha crackers being especially strong ... In addition, although volumes have been weaker in Europe, we expect these to be somewhat offset by stronger volumes in the US,” Bernstein Research said.

The agricultural solutions business is expected to report a second-quarter EBIT (excluding special items) of €393m, 5% ahead of consensus expectations.

Bernstein Research held its rating for BASF at "market-perform" with a €63 target price. However, the analyst remains cautious because industry sentiment remains negative and on the expectation the petrochemical major's management will continue to stick with a cautious guidance.

($1 = €0.82)

By: Franco Capaldo
+44 (0)20 8652 3214

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