Value Overtaking Growth; Treasury Yields and Commodities Bottoming New and ongoing developments continue to support our bullish outlook. In the “new†column, we have bullish inflections in Treasury yields, the value vs. growth ratio, and broad commodities (Bloomberg Commodity index). These are classic signs that the economy is improving and is historically consistent with prior equity bull markets. Another new development is the market becoming increasingly overbought. As we outline below, ...
Small-Caps Testing Critical Resistance; Downgrading Communications As bullish developments pile up, the weight-of-the-evidence continues to support our belief that we may be in the early stages of a broad-based advance. There are some developments that leave us wanting more, but we are inching toward an outright bullish outlook. • The Failure of a Bearish Pattern is Bullish. We often know the implied direction (up or down) that a specific chart pattern is likely to resolve based on historica...
Narrow-moat BASF reported a 47% decline in EBIT for the second quarter, but the stock is trading flat given the company already announced a profit warning on July 8. A EUR 5 billion increase in net income will cause concern, but this was because of a book gain resulting from the deconsolidation of the oil and gas business with the closing of the joint venture with DEA. The common theme throughout management's commentary on the quarter is a very weak automotive industry. Global automotive product...
After the market closed on July 8 narrow-moat BASF released a profit warning, stating 2019 EBIT is now expected to be up to 30% below the prior-year level, compared with previous guidance for an increase in the range of 1%-10%. This is well below consensus and our expectations for EBIT growth to be flat to slightly down. Shares are trading down 5% intraday in response to the news and European peers are similarly all trading in the red. We agree with the market assessment and are lowering our fai...
After the market closed on July 8 narrow-moat BASF released a profit warning, stating 2019 EBIT is now expected to be up to 30% below the prior-year level, compared with previous guidance for an increase in the range of 1%-10%. This is well below consensus and our expectations for EBIT growth to be flat to slightly down. Shares are trading down 5% intraday in response to the news and European peers are similarly all trading in the red. We agree with the market assessment and are lowering our fai...
After the market closed on July 8 narrow-moat BASF released a profit warning, stating 2019 EBIT is now expected to be up to 30% below the prior-year level, compared with previous guidance for an increase in the range of 1%-10%. This is well below consensus and our expectations for EBIT growth to be flat to slightly down. Shares are trading down 5% intraday in response to the news and European peers are similarly all trading in the red. We agree with the market assessment and are lowering our fai...
After the market closed on July 8 narrow-moat BASF released a profit warning, stating 2019 EBIT is now expected to be up to 30% below the prior-year level, compared with previous guidance for an increase in the range of 1%-10%. This is well below consensus and our expectations for EBIT growth to be flat to slightly down. Shares are trading down 5% intraday in response to the news and European peers are similarly all trading in the red. We agree with the market assessment and are lowering our fai...
Narrow-moat BASF reported first-quarter EBIT of EUR 1.7 billion, down 24% over the year-ago period, which was broadly in line with expectations. Volumes were down 4% for the group given generally subdued market sentiment, which led to cautious ordering by customers, particularly in the automotive sector. Chemicals and materials led the charge downward because of the current current oversupplied markets in isocyanates and cracker products. 2019 guidance was maintained for a slight increase in EBI...
Narrow-moat BASF reported first-quarter EBIT of EUR 1.7 billion, down 24% over the year-ago period, which was broadly in line with expectations. Volumes were down 4% for the group given generally subdued market sentiment, which led to cautious ordering by customers, particularly in the automotive sector. Chemicals and materials led the charge downward because of the current current oversupplied markets in isocyanates and cracker products. 2019 guidance was maintained for a slight increase in EBI...
Narrow-moat BASF reported first-quarter EBIT of EUR 1.7 billion, down 24% over the year-ago period, which was broadly in line with expectations. Volumes were down 4% for the group given generally subdued market sentiment, which led to cautious ordering by customers, particularly in the automotive sector. Chemicals and materials led the charge downward because of the current current oversupplied markets in isocyanates and cracker products. 2019 guidance was maintained for a slight increase in EBI...
Narrow-moat BASF reported fourth-quarter EBIT of EUR 630 million, a nearly 60% decline from the prior-year period due mostly to lower isocyanate prices. This was below our estimate but ahead of consensus which, combined with relatively positive 2019 guidance, sent the shares up 4% intraday. EBIT for the full year fell 17% from 2017, in line with the company’s December 2018 profit warning of a 15%-20% decline. BASF expects a slight increase in EBIT for 2019, which means up to 10% growth, altho...
Narrow-moat BASF reported fourth-quarter EBIT of EUR 630 million, a nearly 60% decline from the prior-year period due mostly to lower isocyanate prices. This was below our estimate but ahead of consensus which, combined with relatively positive 2019 guidance, sent the shares up 4% intraday. EBIT for the full year fell 17% from 2017, in line with the company’s December 2018 profit warning of a 15%-20% decline. BASF expects a slight increase in EBIT for 2019, which means up to 10% growth, altho...
After European markets closed Dec. 7, BASF announced it was lowering 2018 guidance due mainly to weakening isocyanate markets, specifically falling prices for methylenediphenyl diisocyanate and toluene diisocyanate prices. The ADR price fell 6.5% in response. BASF now expects 2018 EBIT to fall 15%-20% over 2017 compared with previous guidance for a slight decline up to 10%. We were forecasting a 10% decline. In addition to weakening isocyanate markets, BASF cited lower cracker margins, increas...
Narrow-moat BASF reported third-quarter EBIT of EUR 1.5 billion, down 14% over 2017 and slightly below consensus and our expectations. Shares are trading down modestly, in line with the group. The isocyanates market is rebalancing slightly faster than we expected, leading to a 23% decline in EBIT over the prior-year period in the chemicals segment. We had assumed material declines would commence in the fourth quarter. In any case, we still see a sizeable EBIT decline in 2019 for the chemicals se...
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