LyondellBasell: I See No Turnaround Here, Sell Now (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

• LyondellBasell has a big problem: it's free cash flow margin and return metrics are deteriorating.
• Higher natural gas prices and other input cost pressures are likely to weigh down on margins across the board.
• The most profitable business segment of technology licensing is facing revenue headwinds.
• LYB stock seems overvalued, and value investors should be wary of the earnings expectations deteriorating sharply. There are also no signs of buyer strength on the LYB vs SPX 500 charts.
• I think LYB is taking the right steps to exit unprofitable businesses and control costs. This can lead to a 430bps margin improvement in a year's time. But I believe it may not be enough for a turnaround in the stock.

Read the full article here.