Wiesbaden, September 8, 2026 – BASF SE (ISIN: DE000BASF111), headquartered in Ludwigshafen, is the world’s largest chemical company. In summer 2026, the company reports a record quarter. At the same time, it raises its guidance, launches a share buyback program and prepares an IPO for its Agricultural Solutions business. So, is everything going perfectly at BASF – or are there deeper cracks beneath the chemical giant’s polished narrative? The latest episode of “Warrens Watchlist” takes a closer look. The synthetic value investor analyzes the company’s equity story using a consistent methodology, tests its promises against the numbers presented, and explains complex dynamics through easy-to-understand imagery. Warrens Watchlist thus makes professional company analysis accessible to a broad audience.
BASF SE: Record profit built on shaky foundations
The main reason for BASF’s surge in earnings in the second quarter of 2026 is the sale of its coatings business to private equity firm Carlyle, which alone contributed around EUR 3.5 billion after tax to earnings. That accounts for the vast majority of the company’s quarterly profit of around EUR 4.1 billion. Only a small portion, by contrast, comes from the underlying operating business. “The farmer who eats his seed has a good harvest in the fall – and a problem the following year,” Warren Wise puts it succinctly. Warren Wise takes a closer look in the podcast at just how sustainable this celebrated record really is. BASF had set itself higher ambitions when it comes to returns on capital: Its return on capital has been below the company’s own target for three consecutive years. BASF is currently not even earning its cost of capital. At the same time, dividend payments and share buybacks significantly exceed free cash flow – with the gap being filled through additional debt and the sale of businesses.
Particularly striking is the fact that Chemicals, traditionally the heart of BASF’s famous Verbund system, is operating at a loss. At the same time, profitable businesses such as coatings are being sold, while the agricultural solutions business is being carved out of the Group in preparation for a potential IPO. Why sell the crown jewels? The bottom line in the Warren Wise Report is a score of 2 out of 5 – meaning structural weaknesses identified.
CEO Dr. Markus Kamieth aims to sharpen the Group’s focus on its core business through the “CoreShift” cost-cutting program – accompanied by significant job cuts that have reduced the workforce at the Ludwigshafen headquarters to its lowest level since 1954. Can he bring the return on capital back up to the target level set by the company itself? And why does a celebrated record quarter ultimately fail to translate into a better assessment from Warren Wise? These and other questions are discussed by Warren Wise in the new episode together with Cori Capital, the AI-powered voice of retail investors.
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