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LyondellBasell (LYB)
NYSE:LYB
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LyondellBasell
(NYSE:LYB)
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Rating:60Neutral
Price Target:
$58.00
▼(-0.55% Downside)
Action:ReiteratedDate:02/21/26
The score is held back primarily by weak financial performance through the cycle, including a 2025 net loss and higher leverage, partially offset by resilient cash generation. Technicals are supportive with an improving price trend and positive momentum, while valuation is mixed—high dividend yield but loss-driven negative P/E. The latest earnings call adds support via strong cash discipline and liquidity, though management highlighted continued margin pressure across the industry.
Positive Factors
Cash generation and conversion
Consistent, high-quality cash generation (95% cash conversion on $2.3B ops cash in 2025) is a durable strength. It provides an operational buffer through cycles, funds sustaining capex and strategic actions, supports shareholder returns and deleveraging, and preserves optionality when margins recover.
Value enhancement program (VEP)
A delivered $1.1B recurring EBITDA uplift and a raised $1.5B by-2028 target signal structural margin and efficiency gains. Recurring EBITDA improvements reduce cyclicality of earnings, improve free cash flow durability, and fund reinvestment or debt reduction even in weak commodity cycles.
Liquidity and capital discipline
Strong liquidity ($3.4B cash, $8.1B available) plus disciplined ~ $1.2B 2026 CapEx guidance preserves financial flexibility. This enables the company to navigate prolonged downturns, complete strategic divestments, maintain safety/reliability investments and selectively fund growth without forcing distressed financing.
Negative Factors
Severely depressed industry margins
Margins ~45% below historical averages reflect structural headwinds in polyolefins from oversupply, import pressure and weak end-market demand. Prolonged margin compression materially reduces earnings power, slows cash flow recovery and limits the upside from operational improvements until industry balance restores.
Recent profitability deterioration
A full-year net loss in 2025 with falling revenue and negative margins weakens the company's earnings quality and resiliency. Earnings erosion reduces retained capital, pressures equity, and makes sustaining shareholder returns and investment plans harder if cyclical recovery is delayed or slower than management assumes.
Higher leverage after equity decline
Rising leverage (debt roughly in line with equity historically, ~1.39 in 2025) increases financial rigidity and interest exposure in a cyclical business. Higher leverage curtails strategic flexibility, raises refinancing risk if markets tighten, and magnifies earnings sensitivity to volatile feedstock and product margins.
LyondellBasell (LYB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.79B
Dividend Yield12.78%
Average Volume (3M)6.37M
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth-19.65%
EPS Growth-157.13%
CountryUS
Employees20,000
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.26
Shares Outstanding322,169,980
10 Day Avg. Volume5,725,152
30 Day Avg. Volume6,367,383
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)1.38
Price to Sales (P/S)0.46
P/FCF Ratio36.31
Enterprise Value/Market Cap1.64
Enterprise Value/Revenue1.02
Enterprise Value/Gross Profit11.34
Enterprise Value/Ebitda25.97
Forecast
1Y Price Target
$49.62Price Target Upside-14.92% Downside
Rating ConsensusHold
Number of Analyst Covering15
EPS Forecast (FY)2.56
Revenue Forecast (FY)$29.45B
LyondellBasell Business Overview & Revenue Model
Company DescriptionLyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and Polyolefins Americas; Olefins and Polyolefins Europe, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products; polyolefins; polyethylene products, which consist of high density polyethylene, low density polyethylene, and linear low density polyethylene; and polypropylene (PP) products, such as PP homopolymers and copolymers. The company also produces and sells propylene oxide and its derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomers, acetyls, ethylene glycols, and ethylene oxides and derivatives. In addition, it produces and markets compounds and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors, and powders; and advanced polymers. Further, the company refines crude oil and other crude oils of varied types and sources into gasoline and distillates; develops and licenses chemical and polyolefin process technologies; and manufactures and sells polyolefin catalysts. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.
How the Company Makes MoneyLyondellBasell generates revenue primarily through the production and sale of its chemical and polymer products. The key revenue streams include the sale of olefins, polyolefins, and intermediates, which are sold to a diverse range of customers across different industries. The company's revenue model is heavily influenced by the prices of raw materials such as crude oil and natural gas, as well as global demand for its products. Additionally, LyondellBasell engages in strategic partnerships and joint ventures that enhance its operational capabilities and market reach, contributing to its overall profitability. The company also benefits from its integrated operations, which allow it to optimize production processes and reduce costs, further strengthening its financial performance.
LyondellBasell Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue generated by each business segment, providing insight into which areas are driving growth and how diversified the company's income streams are.
Breaks down revenue generated by each business segment, providing insight into which areas are driving growth and how diversified the company's income streams are.
Data provided by:
The Fly
The FlyLyondellBasell Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Positive
The call conveyed a resilient operational and financial response to a very challenging industry cycle. Highlights include record safety, strong cash generation ($2.3B), exceptional cash conversion (95%), outperformance on the cash improvement plan ($800M vs $600M target), and an expanded value enhancement program target ($1.1B achieved; $1.5B target by 2028). Management preserved liquidity ($3.4B cash, $8.1B available), maintained capital discipline (2026 CapEx ~$1.2B) and advanced strategic actions (European asset divestitures and MoReTec-1 progress). Offsetting these positives are deeply depressed industry margins (~45% below historical averages), segment-level losses (O&P EAI Q4 loss of $61M), maintenance and feedstock-driven margin pressure, project deferrals and modest near-term EBITDA (Q4 EBITDA $417M). Overall, the operational wins and financial discipline materially mitigate cyclical headwinds, positioning the company to capture upside when markets recover.Q4-2025 Updates
Positive Updates
Historic Safety Performance
Total recordable incident rate reached a historic low in 2025, making it the safest year in company history despite elevated maintenance and turnaround activity.
Strong Cash Generation and Conversion
Generated $2.3 billion of cash from operations in 2025 with an excellent cash conversion ratio of 95% (versus a long-term target of 80%, i.e., ~15 percentage points higher).
Exceeded Cash Improvement Plan Targets
Original 2025 cash conservation goal of $600 million was exceeded, delivering $800 million (outperformance of ~$200 million, ~33% above target); company now targeting an additional $500 million incremental cash in 2026, raising the cumulative target to $1.3 billion through end of 2026.
Value Enhancement Program Outperformance and Upsized Target
Value enhancement program delivered $1.1 billion of recurring annual EBITDA in 2025 and management increased the target to $1.5 billion of recurring annual EBITDA by 2028 (a $400 million / ~36% increase in targeted recurring EBITDA).
Maintained Financial Flexibility and Liquidity
Ended 2025 with $3.4 billion of cash and short-term investments and $8.1 billion of available liquidity; issued $1.5 billion of bonds to address near-term maturities while preserving investment-grade balance sheet priorities.
Capital Discipline and CapEx Guidance
Announced 2026 capital plan of ~$1.2 billion (approximately $800 million sustaining and $400 million for profitable growth), reflecting disciplined reallocation and deferment of lower-priority growth projects.
Portfolio and Strategic Progress
Advanced divestment of four European assets on track for completion in Q2 2026; construction of MoReTec-1 progressing and on track for 2027 startup; secured new allocation for cost-advantaged Middle East feedstocks.
Return of Capital to Shareholders
Returned $2.0 billion to shareholders during 2025 through dividends and share repurchases while preserving liquidity and investment-grade priorities.
Segment-Level Operational Improvements
APS delivered a 55% year-over-year increase in EBITDA and substantial improvement in cash generation; IND completed La Porte acetyls turnaround and began conversion to a proprietary catalyst system intended to improve margins.
Negative Updates
Severely Depressed Industry Margins
Industry margins were approximately 45% below historical averages in 2025 (worse than 2024), pressuring profitability across all core businesses and producing prolonged downturn conditions.
Modest Full-Year Profitability and Q4 Weakness
Full-year EBITDA totaled $2.5 billion and EPS was $1.70; fourth quarter EBITDA was only $417 million, reflecting seasonal weakness, higher feedstock and energy costs, and maintenance impacts.
O&P Europe, Asia & International Segment Loss
O&P EAI reported a fourth quarter EBITDA loss of $61 million driven by soft demand, increased low-cost imports into Europe, destocking and elevated maintenance.
Feedstock, Energy and Maintenance Pressures
Higher ethane and natural gas prices, planned and unplanned maintenance, and cold-weather startup issues contributed to sequential margin declines (IND start-up cold-weather downtime expected to reduce Q1 EBITDA by ~ $20 million).
LIFO Inventory and Identified Items Impact
Noncash LIFO inventory valuation charges and identified items (including $61 million net of tax primarily from closure costs and APS Specialty Powders) reduced fourth quarter results, with a net quarterly impact of roughly $52 million.
Market Structural Challenges—Polyolefins
North American polyolefins margins reached multi-decade lows; polypropylene faces particularly weak demand due to heavy exposure to durable goods (autos, construction) and global oversupply (China exports), keeping margins depressed.
Deferral of Growth Investments and Project Timing Risk
Certain growth projects (e.g., Flex-2, MoReTec-2) have been deferred or reprioritized; timing of sustainability-related goals and circular investments was revised, reflecting near-term capital conservatism and potential long-term timing risks for growth and circularity targets.
Workforce Reductions and Operational Trade-offs
Global workforce was reduced by ~7% (~1,350 employees) to the lowest levels since 2018 as part of cost and cash actions—a necessary but notable operational impact amid restructuring.
Expectations for Moderate Working Capital Rebuild
Management expects some moderate working capital build in 2026 after releasing > $1 billion in working capital in Q4 2025, which is already factored into the cash improvement plan but will reduce free cash flow headroom temporarily.
Company Guidance
LyondellBasell guided 2026 with CapEx of about $1.2 billion (≈$400M growth, $800M sustaining), an effective tax rate of ~10% (cash tax ≈10 percentage points higher), and a plan to deliver an additional $500M of cash in 2026 (bringing the cumulative cash‑improvement target to $1.3B through 2026 after over‑delivering in 2025 with $800M conserved vs a $600M goal, including a $400M working‑capital reduction and >$1B working‑capital release in Q4); they reiterated modest sequential market improvement in Q1, expect to operate O&P Americas ~85% (Q4 was ~75% with crackers ~90%), O&P EAI ~75% in Q1, and IND ~85% (Q4 ~75%), and flagged a ~ $20M first‑quarter EBITDA impact from the La Porte restart; strategic targets include VEP recurring EBITDA of $1.1B achieved in 2025 and a $1.5B target by 2028 (mid‑cycle), while 2025 results included $2.3B cash from ops, 95% cash conversion, FY EBITDA $2.5B, EPS $1.70, year‑end cash $3.4B, $8.1B available liquidity, $2B returned to shareholders, total Q4 EBITDA $417M (O&P Americas $164M, EAI –$61M, IND $205M, APS $38M, Technology $80M), and an industry backdrop of margins ~45% below historical averages.LyondellBasell Financial Statement Overview
Summary
Financials reflect a downcycle: the income statement deteriorated into a 2025 net loss with declining revenue and compressed margins, while leverage increased as equity fell. Offsetting this, cash flow remains a stabilizer with positive operating cash flow ($2.3B) and improved free cash flow versus 2024, supporting liquidity through weak conditions.Income Statement
Profitability deteriorated sharply into a loss in 2025 (annual): revenue fell to $30.2B (down 7.4% year over year) and margins compressed materially, with negative operating profit and a net loss (-2.5% net margin). Results were solid in 2021–2023 with healthy margins, but the clear downcycle from 2022 through 2025 (lower revenue and shrinking margins) meaningfully weakens earnings quality and near-term visibility.34
Negative
Balance Sheet
Leverage is moderate-to-elevated for a cyclical chemical business, with debt roughly in line with equity in 2022–2024 (debt-to-equity near ~1.0) and rising to ~1.39 in 2025 as equity declined. Total debt is relatively stable (~$13–14B), which helps, but the 2025 loss and higher leverage increase financial risk versus prior years. Returns on equity were strong in 2021–2023, supportive of the longer-term balance sheet profile, though that strength has weakened recently.56
Neutral
Cash Flow
Cash generation remains a relative strength: operating cash flow stayed positive even in 2025 ($2.3B), and free cash flow improved sharply versus 2024 (2025 free cash flow $2.3B vs. $2.0B in 2024, and $3.4B in 2023). The main drawback is that cash flow has trended down from 2021–2023 peaks and 2025 operating cash flow covered a smaller portion of obligations than in prior years, suggesting reduced cushion if the downturn persists.63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 30.15B | 40.30B | 41.11B | 50.45B | 46.17B |
| Gross Profit | 2.71B | 4.56B | 5.26B | 6.60B | 8.78B |
| EBITDA | 1.19B | 3.61B | 4.64B | 6.33B | 8.70B |
| Net Income | -743.00M | 1.36B | 2.11B | 3.88B | 5.61B |
Balance Sheet | |||||
| Total Assets | 34.00B | 35.75B | 37.00B | 36.37B | 36.74B |
| Cash, Cash Equivalents and Short-Term Investments | 3.45B | 3.38B | 3.39B | 2.15B | 1.48B |
| Total Debt | 15.96B | 12.92B | 13.00B | 13.18B | 13.60B |
| Total Liabilities | 23.80B | 23.16B | 23.94B | 23.74B | 24.75B |
| Stockholders Equity | 10.08B | 12.46B | 12.93B | 12.62B | 11.86B |
Cash Flow | |||||
| Free Cash Flow | 384.00M | 1.98B | 3.41B | 4.23B | 5.74B |
| Operating Cash Flow | 2.26B | 3.82B | 4.94B | 6.12B | 7.70B |
| Investing Cash Flow | -1.78B | -1.85B | -1.78B | -1.98B | -1.50B |
| Financing Cash Flow | -507.00M | -1.90B | -1.95B | -3.41B | -6.38B |
LyondellBasell Technical Analysis
Positive
58.32
Price Trends
49.98
Positive
47.33
Positive
50.75
Positive
Market Momentum
2.02
Positive
58.34
Neutral
49.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYB, the sentiment is Positive. The current price of 58.32 is above the 20-day moving average (MA) of 55.14, above the 50-day MA of 49.98, and above the 200-day MA of 50.75, indicating a bullish trend. The MACD of 2.02 indicates Positive momentum. The RSI at 58.34 is Neutral, neither overbought nor oversold. The STOCH value of 49.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $8.80B | 18.81 | 8.07% | 5.33% | -3.33% | -19.59% | |
68 Neutral | $28.06B | 18.15 | 21.34% | 2.71% | -12.98% | -11.34% | |
65 Neutral | $20.88B | -27.21 | -0.80% | 1.74% | 2.42% | -196.54% | |
63 Neutral | $20.73B | 43.62 | 9.87% | ― | -10.07% | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $18.79B | -24.27 | -7.03% | 12.78% | -19.65% | -157.13% | |
55 Neutral | $13.36B | -8.80 | -15.56% | 2.88% | -5.32% | -1108.29% |
* Basic Materials Sector Average
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LyondellBasell
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DD
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.