Michael Sison, an analyst from Wells Fargo, maintained the Buy rating on LyondellBasell. The associated price target was lowered to $65.00.
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Michael Sison has given his Buy rating due to a combination of factors that highlight LyondellBasell’s potential for earnings growth and strategic financial management. Despite a challenging year with the stock down approximately 28% year-to-date, Sison sees significant earnings upside as the market recovers. The company has reported strong domestic polyethylene demand, with volumes reaching their highest levels since the second quarter of 2022, and expects increased exports to bolster volumes further.
Additionally, LyondellBasell’s strategic reduction in capital expenditures and efforts to preserve cash are expected to strengthen its financial position. The company plans to add $600 million in incremental cash in 2025 and $500 million in 2026 by delaying certain projects and reducing trade working capital and fixed costs. Although there are anticipated headwinds such as lower oxyfuel margins and maintenance challenges, Sison views the stock as attractive from a valuation perspective, with a 12-month price target of $65 based on a 2026 estimated EV/EBITDA multiple of approximately 9.0x.
In another report released on August 1, Morgan Stanley also maintained a Buy rating on the stock with a $70.00 price target.