Deutsche Bank announced on Wednesday that it had downgraded its recommendation on BASF to 'hold' from 'buy', citing a lack of upside potential for the stock.

The analyst - who is maintaining his price target at 56 euros - points out that the German chemical group's share price has rebounded by 27% since its annual lows in January.

In his note, the intermediary attributes this recovery to the improved economic situation in Europe (rising PMIs, forthcoming rate cuts), which he believes has fueled the prospect of a "better-than-expected" first quarter.

With a PER now reaching 15.7x and an Enterprise Value/Ebitda ratio of 8.3x, the stock is trading at the top end of its historical valuation range, notes the professional, which in his view incorporates the scenario of a strong upturn in volumes synonymous with what now appears to be reduced upside potential.

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