(Update: Kepler commentary on Fuchs and current share prices)

FRANKFURT (dpa-AFX) - The recent recovery in the chemicals sector is hitting a ceiling this Tuesday. This is particularly evident for BASF and Fuchs shares following analyst downgrades; by afternoon trading, they were among the primary laggards in the DAX and MDAX, shedding 0.3% and 0.7% respectively. While the European chemicals sector posted modest gains, the broader market advanced more significantly.

Chemical stocks were heavily pressured during the initial phase of the military hostilities involving Iran. More recently, however, optimism had returned on the assumption that the situation in the Middle East would tighten global chemical supplies, allowing European providers to benefit from rising prices.

BASF and Fuchs were among the stocks that had staged a significant recovery, but both have now been downgraded by Kepler Cheuvreux - BASF to "Hold" and Fuchs to a "Reduce" rating. BASF shares had surged by up to 18% within six trading days, while Fuchs gained more than 14%, outperforming the sector index's roughly 10% advance.

In his research note, Kepler Cheuvreux expert Christian Faitz referred to a recent "hype" surrounding BASF due to the Middle East situation, which he considers overdone. He noted that the Ludwigshafen-based group is being viewed not just as a relative winner, but as an absolute winner of the crisis. However, BASF is not entirely insulated. Against this backdrop, he lowered his expectations and cut his price target from 56 to 54 euros.

Regarding lubricant manufacturer Fuchs, Kepler analyst Martin Rödiger wrote that the war in the Middle East represents an even stronger headwind than the challenging economic environment expected in the final quarter of 2025. The primary issue is rising raw material costs, which are expected to weigh on Fuchs' profitability and increase working capital requirements. Rödiger maintains that consensus estimates for Fuchs remain too high. Consequently, he slashed his earnings per share forecasts through 2028 and lowered his price target from 43 to 34 euros./tih/ck/he