BASF Lifts 2026 Outlook After Strong Q2

Chemical plant by a river symbolizes BASF BASFY raising 2026 outlook after strong Q2 results

Key Points

01BASF (BASd) raised its 2026 EBITDA-before-special-items guidance to €6.9–7.7 billion
02Preliminary Q2 EBITDA before special items reached €2.4 billion
03Q2 sales rose 16% year-on-year to €17.2 billion on higher prices and volumes
04Net income was about €4.1 billion, boosted by a coatings business disposal gain

Stronger Q2 performance prompts guidance upgrade

BASF (BASd) released preliminary second-quarter 2026 results on July 15, 2026 and simultaneously raised its full-year earnings outlook. The company now expects EBITDA before special items for 2026 in a range of €6.9 billion to €7.7 billion. This compares with a previous range of €6.2 billion to €7.0 billion, reflecting the impact of stronger-than-expected operating performance. The upgrade is based on the latest quarter’s results and updated assumptions for the remainder of the year.

In the second quarter of 2026, BASF (BASd) generated EBITDA before special items of €2.4 billion. Sales for the quarter rose 16% year-on-year to €17.2 billion. The increase in sales was driven by an 11% rise in prices and a 7% increase in volumes, highlighting improved market conditions for the company’s chemical products. These dynamics underpinned management’s decision to lift the full-year earnings guidance.

Profit boosted by coatings business divestment

BASF reported net income of about €4.1 billion for the second quarter of 2026. A key contributor to this figure was a pre-tax disposal gain of €3.9 billion from the sale of its coatings business to Carlyle. The transaction closed on June 30, 2026 and the gain is reflected in the quarter’s reported net income. This disposal materially strengthened the bottom line in addition to the improvement in operating earnings.

While the disposal gain is a one-off effect, it provides additional financial flexibility following the divestment of a non-core business. The higher net income, combined with the stronger operating performance, positions BASF with increased resources as it moves into the second half of 2026. The company plans to provide more detail on the transaction’s impact when it publishes its semi-annual financial report on July 29, 2026.

Cash flow outlook and macro assumptions unchanged

Despite the improved earnings outlook, BASF left its full-year 2026 free cash flow guidance unchanged. The company continues to forecast free cash flow in a range of €1.5 billion to €2.3 billion for the year. This indicates that, while profitability expectations have risen, the company’s cash generation forecast remains consistent with prior guidance.

BASF also revised several macroeconomic assumptions used for its 2026 planning. The company increased its assumed average Brent crude oil (UKOIL) price to $80 per barrel, up from a previous assumption of $65 per barrel. These updated assumptions incorporate a higher cost environment while still supporting the upgraded EBITDA-before-special-items guidance. BASF noted that geopolitical and economic uncertainty remains a factor for the rest of 2026 and will provide further updates with its semi-annual financial report.

Key Takeaways

01BASF’s upgraded 2026 EBITDA-before-special-items guidance reflects both stronger Q2 operating performance and revised expectations for the remainder of the year.
02The sale of the coatings business to Carlyle delivered a substantial one-time gain that significantly lifted Q2 net income beyond the improvement in underlying earnings.
03Free cash flow guidance was maintained despite higher profit expectations, indicating a cautious stance on cash generation amid a higher assumed oil price and ongoing uncertainty.

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