LyondellBasell: I'm Turning Bearish Again After Q4 Earnings (Archive)
Weak demand, rising costs and valuation froth drive my renewed bearish LYB stance.
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 Industries N.V. continues to face weak demand and higher costs in its core olefins and polyolefins segments, with margins deeply depressed versus historical averages.
- A falling oil-to-gas ratio and rising natural gas prices are expected to pressure LyondellBasell’s margins further over 2026 and 2027.
- LYB stock now trades at a forward P/E premium to sector peers, reversing its usual discount as valuation multiples rise while earnings expectations fall.
- Technical analysis suggests LyondellBasell’s recent rebound has stalled at key resistance, increasing the risk of renewed downside in the share price.
- Free cash flow coverage of the dividend remains fragile, and management’s February board review of capital allocation and capex cuts will be crucial for future dividend policy.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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