HSBC upgrades Germany's BASF on strong margin, return growth

01 July 2013 11:53  [Source: ICIS news]

LONDON (ICIS)--BASF was upgraded by HSBC bank on Monday as it predicted the German chemicals giant would show the best margin and return growth across the sector over the next four years.

HSBC upgraded the company to ‘overweight’ from ‘neutral’ and also raised its target share price to €84 from €75.

The bank said BASF was still capable of strong cash generation and would show strong margin recovery over the next four years.

Also, there would be a long-term pick-up in earnings momentum and any weakness in BASF’s chemical business would continue to be offset by earnings growth in agricultural Solutions and oil & gas, HSBC said in its analyst note.

Last week, investment bank JP Morgan cut BASF’s rating to ‘underweight’ from ‘neutral’, along with LANXES and Solvay, on a weak margin outlook.

At 10:55GMT on Germany’s Xetra stock exchange, BASF’s shares were trading at €68.14, down 0.71% from Friday's close.

By: Graeme Paterson
+44 20 8652 3214

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