BASF

Analysis of BASF share price

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Sale of HILD Samen from BASF to Graines Voltz

09/03/2020 - 14h26

Discover the details of the ongoing sale of BASF's HILD Samen business to the French group Graines Voltz, as well as the probable profits for each of these companies and the impact of this transaction on the stock market.

Elements that can influence the price of this asset:

Analysis N°1

Firstly, concerning the development opportunities open to BASF we particularly note for example its ability to develop new products with a higher investment than before in the area of research. This notably concerns innovations in the GM sector in which this company has heavily invested in recent years. The company could also benefit from the rise in requirements from the Pacific Asia area, a market in which it is already particularly well placed.

Analysis N°2

It is entirely possible that certain threats could curtail the development of BASF’s activities, notably the problem with increasingly strict government regulations particularly those relating to ecology which could severely influence the marketing of certain products.

Analysis N°3

Of course, the significant and increasing competition between BASF and other companies on this market is also a threat to be taken into consideration as well as the strong economical instability shown by countries targeted by BASF and the considerable variation of requirements.

Analysis N°4

Finally, it is not impossible that the BASF Group could again find itself at the heart of an ecological scandal as was the case with the Hannibal chromium spill. This would of course have far reaching significant financial consequences for the group.

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General presentation of BASF

The BASF group is the leader of the chemical industry on an international level. Its activity touches various sectors, mainly the manufacturing of functional products but also chemical products, high performance materials, agrochemical products and other minor products. BASF also participates in production exploration for the oil trade and that of natural gas.

Although the majority of turnover generated by this company is in Germany it also boasts a significant presence in Europe, North America and Pacific Asia.

The BASF share price is currently quoted on the Prime Standard market of the Deutsche Boerse AG in Germany. The BASF group is also included in the national German stock market index, the DAX 30.

Analysis of BASF share price
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The major competitors of BASF

We now propose to discover who are the main competitors facing the BASF group with a precise presentation of the main players operating in its sector of activity or in related sectors:

Bayer

First of all, the Bayer group is a German pharmaceutical and agrochemical company that specialises in the development of medicines, over-the-counter health products, veterinary products and crop protection products for agriculture.

ExxonMobil Corporation

 This other American oil and gas company is also active in the chemical sector. It is now one of the largest companies in the world in terms of turnover and market capitalisation.

Dow Chemical

Also known as The Dow Chemical Company, this American multinational company specialises in the manufacture and sale of chemicals and was listed on the NYSE until August 2017.

Royal Dutch Shell

The Shell Group is an Anglo-Dutch oil, gas and petrochemical company and one of the oldest multinational companies in the world. Shell is also the third largest company in the world in terms of turnover. It is also the number two company in the oil sector.

Total

This group is a privately owned French oil and gas company that is one of the giants of the industry and one of the six largest companies in the world. Total's activities cover the entire oil production chain, from the extraction of crude oil and natural gas to the creation of energy, including refining and commercial distribution activities as well as chemical and petrochemical activities.

Sinopec

The last major competitor of BASF is the Sinopec Group or China Petroleum and Chemical Corporation. This is a Chinese oil and chemical group that is one of the leaders in this sector. Sinopec is also one of the world's largest companies in terms of turnover in all sectors.


The major partners of BASF

Technip

In 2011 Technip entered into a long term partnership with BASF which enabled the latter to benefit from substantial engineering resources for its projects, notably in Europe but also in other areas. This collaborative agreement covered a wide range of services from initial studies to the implementation of projects.

Bouygues Construction

At the time of the Campus Innovation organised by Bouygues Construction, on Tuesday 7 October 2014, one of the global leaders in construction and the world leader in the chemicals sector, BASF, signed a long term co-operation agreement. 

R-M and Glasurit

In 2015, R-M and Glasurit, two brands that specialise in high quality paints for the BASF group, became partners of Tesla to reproduce colours for vehicles after repair work.

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The factors in favour of a rise in the BASF share price:

Investors taking position on BASF shares with a long term strategy start with a full analysis of the strengths and weaknesses of this company. This is what we shall do now beginning with a detailed summary of this group’s strong points.

It should firstly be remembered that BASF is the international leader of companies in the chemicals sector which gives it a strong position with its suppliers and clients. To achieve this dominant position BASF implemented a strategy based on numerous subventions and the creation of a number of co-operatives in more than 80 different countries.

BASF also invests heavily in sustainable agriculture to increase its share of the market whilst offering farmers solutions that truly respond to their requirements. The group also distinguishes itself with certain high quality products such as high performance polymers.

BASF can also count on the strength of its brand and its popularity in global industries. In fact, the group does everything possible to retain this reputable brand image with the public and continues to do so despite new actors in the industrial sector.

The factors in favour of a drop in the BASF share price:

If reading our detailed synopsis of the strong points of the BASF Group has tempted you into immediately taking a buy position on this asset then we would first recommend you allow us to also point out the weaknesses of this company that could negatively influence the rise in its share price. Here therefore is a detailed list of the major weak points of the BASF Company.

Primarily, despite its progress in this matter the BASF group remains highly exposed to the significant costs of manufacturing less polluting products. The current ecological problems are central to the chemical companies worries, particularly concerning agricultural products.

The second weak point of the BASF group relates to the research and development expenses that are less than those of their competitors. This could lose the company part of the market if it allows itself to be left behind by other players that gain larger parts of the market in the industrial chemical sector that relies heavily on innovative products.

As you may have noted the weak points of the BASF Company are far less numerous than its advantages. However, these weaknesses could be significant for shareholders and investors and could therefore negatively influence the price of this asset. It is therefore important to carefully monitor these elements and take them into account in your trading strategies.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What major investments has BASF made?

The BASF Group currently holds shares in various companies, including 100% of the shares in BASF Coatings GmbH, 100% of the shares in BASF Services Holding GmbH, Ludwigshagen, 100% of the shares in BASF Schwarzheide, 100% of the shares in Polyurethanes BASF GmbH, Lemfoerde, 100% of the shares in Wintershal Holding AG, 100% of Kassel, 50% of the shares in Wingas GmbH Kassel and 50% of the shares in Styrenics in Frankfurt. It also has other subsidiaries in more than 170 countries around the world.

Who are the major shareholders of BASF?

Currently, the capital of the BASF Group is held by various private shareholders including Norges Bank Investment Management for 2.98%, The Vanguard Group for 2.80%, DWS Investment for 1.60%, Amundi Asset management for 1.53%, BNP Paribas Asset management for 1.49%, Franklin Advisers for 1.41%, DWS Investments for 1.39%, BlackRock Asset management Deutschland for 1.20%, Deka Investment for 1.04% and BlackRock Investment Management for 1.02%.

Which technical indicators should be used to trade BASF shares?

If you wish to trade BASF shares effectively, you must carry out, in addition to your fundamental analysis of this stock, a relevant and comprehensive technical analysis. To do this, you will preferably use customizable stock charts that allow you to choose the period and display several indicators simultaneously. With regard to these indicators, the focus here will be on trend and volatility indicators as well as strategic points such as pivots, supports and resistances.

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