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LyondellBasell (LYB)
NYSE:LYB
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LyondellBasell
(NYSE:LYB)
54Neutral
Positive Factors
Free Cash Flow
FCF remains strong, comfortably covering dividends and capital expenditures, standing out compared to peers in the current macroeconomic environment.
Price/Margin Improvement
LYB is fairly confident on price and margin improvement with approximately 5% of industry capacity coming offline.
Valuation
Analyst reiterates an overweight rating on LYB due to stock underperformance and attractive valuation with significant upside potential in a recovery to mid-cycle dynamics.
Negative Factors
Chemical Demand
Weak chemical demand and tighter spreads have rebased LYB earnings lower.
Earnings Pressure
LYB's earnings are pressured by higher costs and continued new global supply.
Market Oversupply
Polyethylene and polypropylene markets are seen as oversupplied, potentially taking years to rebalance.
LyondellBasell (LYB) vs. S&P 500 (SPY)
Market Cap
$18.40B
Dividend Yield9.42%
Average Volume (3M)4.43M
Price to Earnings (P/E)13.7
Beta (1Y)0.78
Revenue Growth-1.46%
EPS Growth-36.00%
CountryUS
Employees20,000
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)4.14
Shares Outstanding323,446,170
10 Day Avg. Volume6,431,509
30 Day Avg. Volume4,425,065
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.57
Price to Cash Flow (P/CF)3.00
P/FCF Ratio3.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$71.29Price Target Upside25.31% Upside
Rating ConsensusHold
Number of Analyst Covering15
LyondellBasell Business Overview & Revenue Model
Company DescriptionLyondellBasell Industries N.V. is a leading global chemical company operating in the manufacturing of plastics, chemicals, and refining sectors. The company's core products include polyethylene and polypropylene, which are used in a wide range of applications across industries such as packaging, automotive, and construction. LyondellBasell also produces advanced polymers, fuels, and refining products, playing a crucial role in the global supply chain for various industrial and consumer applications.
How the Company Makes MoneyLyondellBasell makes money primarily through the production and sale of chemical and plastic products. Its revenue model is centered around three main business segments: Olefins and Polyolefins, Intermediates and Derivatives, and Refining. Olefins and Polyolefins is the largest segment, generating revenue from the sale of basic chemicals and plastic resins like polyethylene and polypropylene. The Intermediates and Derivatives segment contributes through the production of propylene oxide and its derivatives, acetyls, and other chemicals that are key ingredients in numerous industrial processes. The Refining segment adds to the company's earnings by processing crude oil into refined products, such as gasoline and diesel. LyondellBasell's diverse portfolio and strategic partnerships with key industry players enhance its market presence and contribute significantly to its profitability.
LyondellBasell Financial Statement Overview
Summary
LyondellBasell faces significant financial challenges across key areas. The income statement reflects profitability issues with negative gross profit and declining revenue. The balance sheet shows moderate stability but cautionary signs regarding equity levels. Cash flow analysis indicates resilience in operational cash generation, but overall cash flow stability remains a concern due to volatility.Income Statement
LyondellBasell's income statement reveals significant challenges, with gross profit turning negative in the latest year, indicating potential cost control issues. Revenue has declined sharply from previous years, coupled with decreasing net income and margins. The negative trajectory in revenue and profit margins reflects instability and profitability concerns in its operations.45
Neutral
Balance Sheet
The balance sheet shows a moderate level of stability with a reasonable debt-to-equity ratio. However, the decline in stockholders' equity in recent years raises concerns about the company's financial foundation. Although total assets have remained relatively stable, the equity ratio has improved, indicating a cautious but positive aspect of its financial position.60
Neutral
Cash Flow
Cash flow analysis indicates some resilience, with steady operating cash flow. However, the free cash flow growth has been volatile, and the latest figures show a decline. The capability to generate cash relative to net income remains consistent, but overall cash flow stability is a concern.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 40.30B | 41.11B | 50.45B | 46.17B | 27.75B | Gross Profit |
| 4.56B | 5.26B | 6.60B | 8.78B | 3.39B | EBIT |
| 1.82B | 3.05B | 5.10B | 6.77B | 2.49B | EBITDA |
| 3.61B | 4.64B | 6.10B | 8.94B | 3.61B | Net Income Common Stockholders |
| 1.36B | 2.11B | 3.88B | 5.61B | 1.42B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.38B | 3.39B | 2.15B | 1.48B | 2.46B | Total Assets |
| 35.75B | 37.00B | 36.37B | 36.74B | 35.40B | Total Debt |
| 12.45B | 13.00B | 13.18B | 13.60B | 17.49B | Net Debt |
| 12.45B | 9.61B | 11.02B | 12.13B | 15.73B | Total Liabilities |
| 23.16B | 23.94B | 23.74B | 24.87B | 27.41B | Stockholders Equity |
| 12.46B | 12.93B | 12.62B | 11.86B | 7.97B |
| Cash Flow | Free Cash Flow | |||
| 3.82B | 3.41B | 4.23B | 5.74B | 1.46B | Operating Cash Flow |
| 3.82B | 4.94B | 6.12B | 7.70B | 3.40B | Investing Cash Flow |
| -1.85B | -1.78B | -1.98B | -1.50B | -4.91B | Financing Cash Flow |
| -1.90B | -1.95B | -3.41B | -6.38B | 2.27B |
LyondellBasell Technical Analysis
Negative
56.89
Price Trends
71.69
Negative
73.68
Negative
81.92
Negative
Market Momentum
-1.25
Positive
38.85
Neutral
14.73
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYB, the sentiment is Negative. The current price of 56.89 is below the 20-day moving average (MA) of 66.74, below the 50-day MA of 71.69, and below the 200-day MA of 81.92, indicating a bearish trend. The MACD of -1.25 indicates Positive momentum. The RSI at 38.85 is Neutral, neither overbought nor oversold. The STOCH value of 14.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LYB.
LyondellBasell Risk Analysis
LyondellBasell disclosed 28 risk factors in its most recent earnings report. LyondellBasell reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LyondellBasell Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $9.05B | 10.21 | 16.11% | 4.19% | 1.91% | 2.94% | |
66 Neutral | $22.86B | 16.89 | 19.13% | 2.67% | -4.59% | 11.09% | |
66 Neutral | $10.37B | 14.60 | 12.69% | ― | -2.64% | 120.05% | |
62 Neutral | $11.18B | 18.76 | 5.76% | 2.31% | -3.24% | 24.29% | |
62 Neutral | $24.65B | 35.23 | 3.12% | 2.63% | 2.64% | 80.37% | |
54 Neutral | $18.40B | 13.70 | 10.69% | 9.42% | -1.46% | -36.00% | |
47 Neutral | $2.49B | -2.97 | -22.82% | 3.51% | 4.13% | -28.53% |
* Basic Materials Sector Average
Performance Comparison
LYB
LyondellBasell
56.89
-37.63
-39.81%
EMN
Eastman Chemical
78.35
-15.74
-16.73%
PPG
PPG Industries
100.73
-31.38
-23.75%
WLK
Westlake Chemical
89.74
-61.16
-40.53%
DD
DuPont de Nemours
58.89
-13.18
-18.29%
AVTR
Avantor
15.22
-9.49
-38.41%
LyondellBasell Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: -23.94% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Neutral
Despite facing significant challenges in market conditions and specific segments, LyondellBasell demonstrated resilience through strong safety performance, strategic progress, robust cash conversion, and dividend growth. However, the substantial industry downturn and segment-specific losses indicate ongoing challenges.Highlights
Outstanding Safety Performance
LyondellBasell achieved a total recordable injury rate of 0.13 in 2024, marking it as the second-lowest year for the company. Six sites surpassed 10-plus years of no injuries, and the APS segment reduced incident rates by 39% compared to 2023.
Strong Cash Conversion and Shareholder Returns
LyondellBasell generated $3.8 billion of cash from operations with a 90% cash conversion ratio. The company returned $1.9 billion to shareholders in dividends and repurchases.
Strategic Progress and Growth Initiatives
The company unlocked approximately $1.3 billion of incremental normalized EBITDA and exceeded expectations with the Value Enhancement Program contributing $600 million to 2024 EBITDA.
Circular and Low-Carbon Solutions Growth
Volumes increased by 65% in 2024 to over 200,000 tons. The business targets $1 billion of incremental EBITDA from 2 million tons of annual volumes by 2030.
Dividend Growth
The quarterly dividend increased by 7% in May 2024, marking the 14th consecutive year of annual dividend growth.
Lowlights
Challenging Market Conditions
Fourth quarter industry margins were about 60% of historical averages. Polypropylene margins were less than 50% of historical averages, and operating rates were 5-10 percentage points below industry norms.
European Market Weakness
The Olefins and Polyolefins Europe, Asia, and International segment operated at approximately 55% due to weak demand and maintenance, resulting in an EBITDA loss of $146 million.
Refining Segment Losses
The refining segment incurred an EBITDA loss of $24 million, with refinery shutdown activities expected to be completed in the first quarter of 2025.
Impairments and Write-downs
Identified items of $852 million net of tax included non-cash write-downs related to O&P EAI assets and Advanced Polymer Solutions segment.
Company Guidance
During the LyondellBasell call, several key metrics were highlighted, underscoring both the challenges and achievements of the company in 2024. The total recordable injury rate was 0.13, reflecting strong safety performance, and earnings per share were reported at $6.40 with an EBITDA of $4.3 billion. The company generated $3.8 billion in cash from operations, achieving a 90% cash conversion ratio. Shareholder returns included $1.9 billion in dividends and share repurchases. Industry margins for the fourth quarter were around 60% of historical averages, with polypropylene margins less than 50% of historical averages and polyethylene margins compressed. The CLCS business saw a 65% increase in volumes to over 200,000 tons, and the VEP contributed approximately $600 million to the 2024 EBITDA. The company remains committed to a long-term strategy of achieving a year-end run rate of $1 billion of recurring annual EBITDA improvements.LyondellBasell Corporate Events
Executive/Board Changes
LyondellBasell Announces New Chief Accounting Officer
Neutral
Mar 17, 2025
On March 11, 2025, LyondellBasell Industries N.V. announced the resignation of Chukwuemeka A. Oyolu, their Senior Vice President and Chief Accounting Officer, effective March 24, 2025. Matthew D. Hayes has been appointed to fill the role, bringing extensive experience from within the company and previous roles at Halliburton. This leadership change is expected to maintain the company’s robust financial management and reporting standards.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.