BAS:DEU - Embedded Expectations Analysis - 2018 12 18
BASF SE (BAS:DEU) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with a 17.8x Uniform P/E, implying bearish expectations for the firm, and management has concerns about their Functional & Materials Solutions segment, sales levels of Performance Products, and their ability to improve their value chainSpecifically, management may lack confidence in the sustainability of offshore liftings in Libya driving higher volume levels, and in their ability to strengthen their value chain through back integrating key raw materials. Additionally, they may have concerns about their smaller acquisitions, and about the duration of low water levels in Q3 2018. They may also lack confidence in their ability to maintain strength of their acrylic acid production, and may be exaggerating how much they benefit from increased feed flexibility. In addition, they may lack confidence in the sustainability of high chemical demand in Guangdong, and may be concerned about continued underutilization on the Rhine. Finally, they may lack confidence in their ability to accelerate their Functional & Materials Solutions segment in Q4 2018, and may be concerned about sales declines of Performance Products
BASF is a chemical company based in Germany. Co. conducts its operations through five reportable segments: Chemicals, which comprises the Petrochemicals, Monomers and Intermediates divisions; Performance Products, which consists of the Dispersions & Pigments, Care Chemicals, Nutrition & Health and Performance Chemicals divisions; Functional Materials & Solutions, which comprises the Catalysts, Construction Chemicals, Coatings and Performance Materials divisions; Agricultural Solutions, which comprises the Crop Protection division; and Oil & Gas, which is composed of the Oil & Gas division.
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