LyondellBasell Industries N.V. (LYB) is a global chemicals company producing polymers, chemicals, and refined fuels used in transportation, packaging, infrastructure, and consumer products. Headquartered in Rotterdam, the Netherlands, it operates manufacturing sites and technology platforms worldwide that convert feedstocks into advanced materials.
The company delivers innovative process solutions to customers across multiple industries, with a focus on sustainable chemical manufacturing for everyday applications. LYB’s $20.54 billion market capitalization makes it a “large-cap” stock.
LYB’s stock reached a 52-week high of $83.94 on Mar. 31, but is down 22.4% from that level. A dividend cut, weak pricing and demand in plastics and derivatives have hit the stock’s trajectory. Over the past three months, the stock has declined modestly. Aligning with LYB, the broader State Street Materials Select Sector SPDR ETF (XLB) is also down marginally over the same period.
Over the past 52 weeks, the stock has gained 7.5%, while the State Street Materials Select Sector ETF has gained 11.6%. LYB’s shares have also surged 50.5% year-to-date, while the sector-specific fund has increased 9.4%. LYB’s stock has been trading higher than its 200-day moving average since early February, but lower than its 50-day moving average since late May.
The war in the Middle East has increased petrochemical costs, which are unlikely to be mitigated anytime soon. The company faced the brunt of this when its sales and other operating revenues dropped 6.3% year-over-year (YOY) to $7.20 billion in the first quarter. However, excluding some identifying items, the company’s EPS grew 48.5% YOY to $0.49. LYB has also had to cut its quarterly dividend from $1.37 per share to $0.69 per share, with the latest $0.69 payment made on June 8.
We compare LYB’s performance with that of another specialty chemicals stock, PPG Industries, Inc. (PPG), which has dropped 1.8% over the past 52 weeks but gained 10.3% YTD. Therefore, LYB has been the outperformer over these periods.
Wall Street analysts are moderately bullish on LYB’s stock. The stock has a consensus rating of “Moderate Buy” from the 20 analysts covering it. The mean price target of $80 reflects a 22.8% upside from current levels. Moreover, the Street-high price target of $100 indicates a 53.5% upside.
