(CercleFinance.com) – Deutsche Bank announced on Wednesday that it had downgraded its recommendation on BASF to ‘hold’ from ‘buy’ previously, citing the lack of upside potential on the stock.
The analyst – who maintains his price target at 56 euros – recalls that the stock price of the German chemical group has rebounded by 27% since its annual lows, reached in January.
In his note, the intermediary attributes this recovery to the improvement in the economic situation in Europe (rising PMI, upcoming rate cuts), which, according to him, has fueled the prospect of a first quarter ‘better than expected’.
With a PER which now reaches 15.7x and an Enterprise Value/Ebitda ratio of 8.3x, the stock is trading at the top of its historical valuation range, notes the professional, which according to him integrates the scenario of ‘a strong recovery in volumes synonymous with an upside potential now appearing to be reduced.
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