BASF’s Circular Supply Chain Pivot and Coatings Divestiture Set Stage for Share Buyback Surge

The chemical giant is quietly assembling the pieces for a transformation on two fronts. While deepening its foothold in chemical recycling, BASF is also preparing for the proceeds of a major asset sale to flow directly into its stock repurchase programme, creating a dual catalyst that could reshape the company’s profile for investors.

The Ludwigshafen-based group has expanded its partnership with US-based Encina Development Group far beyond a simple supply agreement. A new accord grants BASF the right to take an equity stake in a planned large-scale facility on the US Gulf Coast, securing long-term access to chemically recycled benzene for its “Ccycled” product line. The collaboration now includes advisory roles on procurement strategy and project planning ahead of a final investment decision. The original supply contract was signed back in June 2024.

Meanwhile, the sale of BASF’s coatings division to private equity firm Carlyle is moving steadily towards completion. EU antitrust clearance has been secured, and the transaction is on track to close in 2026. The company has installed an external veteran to steer the business until the handover: Steve Arndt, poached from rival Axalta, takes over as Senior Vice President of global automotive refinish coatings, succeeding Chris Titmarsh. The appointment signals BASF’s intent to maintain earnings momentum in the division during the transition.

The cash generated from the coatings disposal is earmarked for an aggressive capital return. BASF has already bought back 27.8 million of its own shares under its current €1.5 billion programme, which is scheduled to run until the end of June 2026. The buyback pace accelerated in the last week of May, with 950,000 shares repurchased in a single week.

Management has laid out financial targets for 2026, forecasting EBITDA of between €6.2 billion and €7.0 billion and free cash flow in the range of €1.5 billion to €2.3 billion. These numbers provide the backdrop for the buyback: once the coatings proceeds land, market observers expect the additional demand for BASF stock to provide a tangible floor.

Should investors sell immediately? Or is it worth buying BASF?

On the cost front, the company is pursuing its internal “CoreShift” programme. Led by Julia Raquet, the initiative targets a 20% reduction in fixed costs across the core segments by 2029, measured against the 2024 baseline.

The stock itself is trading at €50.48, roughly 8% below its 52-week high of €55.05 touched in mid-April, but still showing a year-to-date gain of nearly 13%. The 200-day moving average stands at €46.82, and the Relative Strength Index of 41.9 points to a neutral technical position.

Not everything is running smoothly on the communications side. A study by Instinctif Partners awarded BASF a top score of 90 out of 100 for the craftsmanship of its digital investor relations, but only 50 out of 100 for messaging. The consultancy criticised the group for not proactively discussing digitalisation with investors, flagging untapped potential to showcase its technological transformation.

Investors will have the chance to hear directly from management on Monday, 8 June, when BASF hosts a virtual deep dive on its Zhanjiang Verbund site. The next set of formal numbers arrives in July with the half-year results for 2026.