LyondellBasell: 5 Reasons To Brace For More Pain (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Despite the benefit of a lower natural gas prices outlook, prospects remain weak as the industry downcycle is expected to lead to worse pricing pressures later this year.
• Cash commitments associated with the divestment of unprofitable European business assets can offset some annual cost savings.
• Amid weak cash flows, management is prioritizing dividends over growth, delaying key growth projects that can boost EBITDA and return profiles.
• LYB stock has gone down, but the stock is still overvalued vs. peers with a deteriorating fundamentals outlook. The sellers continue to print lower lows with momentum and increased conviction.
• On the plus side, LYB may be a bit insulated from US-China tariff volatility as it has low Chinese revenue exposure and alternative supply sources to de-risk from China.

Read the full article here.