In recent weeks and months, there have been more negative news from the world’s largest chemical company, BASF. The company had announced the closure of various unprofitable plants at its headquarters in Ludwigshafen. However, on Thursday, the DAX company reported that it plans to expand production capacities in another area. According to a company spokesperson, around 50,000 additional tons of grey insulation material will be produced annually at the Ludwigshafen integrated site starting in 2027. The spokesperson stated, “The additional quantities are intended to meet the growing market demand.” Currently, BASF produces nearly 200,000 tons of the material annually at the company’s headquarters. BASF anticipates that in the coming years, there will be an increasing demand for these materials due to energy-efficient renovations. Therefore, the management intends to expand the existing facilities with new production lines. During the construction phase, insulation material will continue to be produced unchanged in the existing plants. Meanwhile, Warburg Research has maintained its investment rating for BASF shares at “Hold.” Analyst Oliver Schwarz has maintained the fair value of the stock at 51 euros following the third-quarter figures. He suggested that BASF may lower its annual targets as the company may have suffered from persistently weak demand in Europe and sluggish business recovery in Asia in the third quarter.
The increasing demand for insulation materials plays into BASF’s hands. THE INVESTOR remains confident in BASF shares. The stock of the strategically well-positioned company, which is relatively cheap compared to historical levels, is attractive for long-term investors. The position should be maintained with a stop-loss at 36.00 euros.
Disclosure of conflicts of interest: The CEO and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has directly and indirectly entered into positions in the financial instruments mentioned in the publication or related derivatives that may benefit from any resulting price development: BASF.
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