Analyst Note| Rob Hales, CFA |
Narrow-moat BASF released second-quarter EBIT of EUR 2.4 billion, well above the company-compiled consensus, and raised 2021 guidance for the second time this year. The company now expects 2021 EBIT to be EUR 7.0 billion to EUR 7.5 billion compared with EUR 5.0 billion to EUR 5.8 billion previously. While we expected the first guidance upgrade, this one is more of a surprise. Consequently, we are raising our 2021 estimates significantly, which causes our fair value estimate to increase to EUR 73 ($22) from EUR 68 ($20). At current levels, the shares look fairly valued.