BASF SE shares: yield potential — 14.9% thanks to the optimistic forecasts

BASF SE Profile

BASF Societas Europaea is the world's largest chemical group with headquarters located in Germany. The company was founded in 1865 and operates in different markets. Company`s business activity is established in the segments of chemicals, plastic materials, high-output products, functional, agricultural solution as well as in the area of oil and gas. 

What's the idea?

The idea is to capitalize on a potential rally with the optimistic forecast. The company expects a higher operating profit for Q2 than expected.

Why do we like BASF SE?

Reason 1. Companyʼs own forecast on EBIT.

Proto Labs, Inc. is considered the fastest digital manufacturer of plastic and metal parts in the US. The company services are becoming more in-demand because of more protective gear (including masks and face shields) being produced.

Reason 2. The construction of Nord Stream-2 is within reach of its completion.

The Danish Energy Agency has given its permission for Russian anchor ships to complete the gas pipeline. Previously Denmark was against the use of anchor ships as there is a large amount of old ammunition at the bottom of the Baltic Sea, so government regulators feared for the safety of the work. However, the examination established that the gas pipeline will run far from the areas with sunken ammunition. BASF is among the shareholders of Nord Stream 2 AG. Most likely, the construction of this gas pipeline will be completed by the end of the year. 

Reason 3. Latest updates from investment houses

Analysts at Jefferies and Commerzbank recommend buying shares with the target prices of €66 and €57, respectively. American investment bank, Morgan Stanley, advises to hold BASF securities with the target price of €53. The average target price for a share is €52.88. 

Reason 4. Technical overview

BASF quotes have been moving in an uptrend since the middle of May, showing a rebound from the trendline on July 13. On the same day the shares managed to break the local downtrend. Within that we can expect further price recovery to the local maximum from June 8 at € 58.5.

How to use the idea?

1. Buy shares with BAS ticker for €50.9.
2. Allocate not more than 3-4% of your limit for mid-term transactions per position.
3. Lock in your position when shares reach the price of €58.5.

How to buy the shares of BASF SE?

This can be done in two ways:

1. Through Freedom24 trading web platform.

Type in “BASF SE” or “BAS” (BASF SE company ticker at Xetra) in “Web terminal” section and select BASF.EU. from search results. Then open a security session, select the required number of shares and click the “Place a purchase order” button.

2. Through Freedom24 app for iPhone.

Click the search icon in the top right corner of the “Quotes” window. Type in “BASF SE” or “BAS” (BASF SE company ticker at Xetra) in the appeared search box and select BASF.EU. from search results. BASF SE share will be added to the market watch — click on it and select the “Order” tab from the opened card. Select the required number of shares and click the “Place a purchase order” button.

If you don`t have an account yet, set it up right now — remotely, in 10 minutes. To do this, it is enough to fill out a short questionnaire and go through the process of verification.

Invest in BASF SE shares until the news and forecasts speak in favor of the company in times of crisis! 

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Cyprus Ltd or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.