Stocks of BASF and Allianz face uncertainty on the stock market
Rewritten Article:
This market roller coaster's latest drop: Where BASF and Allianz stand now
The initial euphoria is fading—BASF shares are heading back south, having recently escaped a severe downward trend just a few weeks ago. While Allianz isn't in the red yet, the tension is palpable:
BASF: Hanging by a Thread?
Those sweet gains BASF has managed this year have been largely pocketed by investors already. The German chemical giant has once more found itself stranded at the 200-day line, struggling for a short-term comeback. Should the share plummet through this support, it might freefall further. But what's the real reason behind this sudden loss?
US bank JPMorgan has switched BASF from "Neutral" to "Underweight" and dropped its price target from €52 to €45 due to analyst Chetan Udeshi's reassessment of the European chemical sector. The sector's already reeling, and the US demand is also dwindling, JPMorgan noted. Moreover, Udeshi deems the BASF share expensive compared to its peers. Some investors might argue, but this doesn't change the short-term instability of BASF.
Before we all hit the panic button, it's essential to remember that there's plenty of fear and uncertainty in the stock market right now. The US indices are splitting hairs about whether they'll form a double bottom (a positive sign) or a deeper descent. In the latter case, short-term profits should be taken. However, in the long term, the BÖRSE ONLINE team still believes in the robustness of the BASF share, with a price target of €65.
But what about Allianz?
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Allianz: Ready for a Correction?
To avoid misconceptions right off the bat, let's make it clear: Allianze remains an outstanding long-term investment. That said, we've pointed out in recent weeks that Allianz has surged too high, and some indicators are overheated. Now, a correction to the 50-day line at approximately €335 or even a retest of the important price level around €300 could be just around the corner.
Investors concerned about short-term jitters are starting to cash out and tread water, waiting for clarity. Total profits aside, Allianz's valuation remains attractive, with a P/E ratio of 12.7 and a dividend yield of 4.75%. However, Swiss bank UBS has revamped its outlook on Allianz. Analyst Will Hardcastle has kept the rating at "Neutral" with a price target of €320. Hardcastle now favors life insurers over non-life sector stocks within the European insurance sector.
Nevertheless, BÖRSE ONLINE remains positive about the German dividend stock, set to paying out a whopping €15.40 per share in May. We still recommend it with a long-term price target of €350.
Also, consider these articles: Fund Manager Warns: "I've Never Seen This With Stocks Before" or Is the MSCI World on the Verge of a Crash? What ETF Investors Need to Know
Allianz (WKN: 840400) Conflict of Interest Disclosure
The publisher Börsenmedien AG's majority shareholder and CEO, Mr. Bernd Förtsch, holds direct and indirect interests in the aforementioned financial instruments mentioned in this piece, which may benefit from any resulting price fluctuations.
Investors are facing a tough decision with BASF, as its shares have been struggling to recover after being downgraded by JPMorgan, with a price target lowered from €52 to €45. On the other hand, Allianz, although remaining an attractive long-term investment, might experience a correction, potentially revisiting the 50-day line at €335 or even the important price level around €300, according to UBS analyst Will Hardcastle.
