The majority of experts recommend buying the BASF share in new analyses. With bonus certificates with a cap, investors can also achieve high returns if the share cannot meet the high expectations.
The BASF share was recently able to rise significantly from its low for the year on September 28, 2022 at EUR 37.90. After the share even traded above EUR 47 a few days after the confirmation of the figures for the third quarter, it gave up part of the price gain again and is currently quoted in the range of EUR 45.30.
Although rising investment and energy costs will weigh on BASF's earnings, the experts at Deutsche Bank reiterated their buy recommendation for the share, which is classified as severely undervalued, with a price target raised from EUR 55 to EUR 60.
The investment idea
Investors who are considering investing in BASF shares at the current price level could consider purchasing a bonus certificate with a cap as an alternative to buying shares. Bonus certificates can significantly reduce the risk of buying shares directly and still allow returns in the double-digit percentage range.
Apart from dividend payments, the direct purchase of the BASF share will only enable a positive return if the share price increases. With bonus certificates with and without a cap, investors can generate disproportionately high returns not only when the share price rises, but also when the price stagnates or falls.
The way it works
If the BASF share never touches or falls below the barrier of EUR 32 by the certificate's valuation date, the bonus certificate with cap will be redeemed on December 21, 2023 with the maximum redemption amount of EUR 46.
The key data
The BNP Paribas bonus certificate with a cap (ISIN: DE000PD32E22) on the BASF share has a bonus level and a cap of EUR 46. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is 32 euros. At the BASF share price of EUR 45.30, investors could purchase the certificate for EUR 39.03.
The chance
Since the certificate is currently available for EUR 39.03, it enables a gross return of 17.85 percent (equivalent to 16 percent per year) until December 2023 if the share price has never fallen by 29.35 percent to EUR 32 or falls below.
The Risks
If the price of the BASF share touches the barrier of EUR 32 by the valuation date and the share is listed below the cap on the valuation date, the certificate is redeemed at the closing price of the share determined on the valuation date. If this is determined below EUR 39.03, then the investment will cause a capital loss.
This article does not constitute a recommendation to buy or sell BASF shares or investment products based on BASF shares. No liability is assumed for the correctness of the data.
