LyondellBasell Faces Tough Market Conditions as Stock Prices Slide
Despite its global presence, LyondellBasell Industries N.V. (LYB) struggles to keep pace with market growth.
Based in Houston, Texas, LyondellBasell Industries N.V. is a major player in the global plastics, chemical, and refining industries. Their products find applications in electronics, automotive components, packaging, construction materials, and biofuels. With a market capitalization of $26.9 billion, LyondellBasell operates across North America, Europe, and the Indo-Pacific region.
This past year, LyondellBasell has notably underperformed compared to the broader market. The stock price has dropped 12.9% year-to-date and 13.5% over the past 52 weeks. In contrast, the S&P 500 Index ($SPX) has shown gains of 24.7% in 2024 and 31.1% over the past year.
When evaluating its performance against the Materials Select Sector SPDR Fund (XLB), LyondellBasell also falls short. The XLB has shown gains of 9.4% in 2024 and 15.9% over the past 52 weeks.
The company faced challenges early in the year. Following the release of its fiscal 2023 earnings on February 2, LyondellBasell’s stock fell 1.9%. This was primarily attributed to an alarming 18.5% year-over-year decline in sales and operating revenues, totaling $41.1 billion. The downturn stemmed from reduced demand in China, leading to decreased investor confidence.
Recent Q3 earnings released on November 1 revealed continued struggles. The stock price decreased further in the following trading session. The company’s total revenues fell 2.9% year-over-year to $10.3 billion, while adjusted EPS saw a significant drop of 16.1% to $1.88. This figure missed analysts’ estimates by 7.4%.
Demand weakness, particularly in Asian markets, has led to the ongoing decline in LyondellBasell’s financial performance. Yet, the company aims to drive long-term value by focusing on operational and commercial excellence, adapting to customer needs. As interest rates ease, analysts anticipate increased demand for durable goods, which may benefit LyondellBasell’s polypropylene and I&D segments in the upcoming fiscal year.
For the fiscal year ending in December, analysts predict an 18% year-over-year drop in adjusted EPS to $7.09. LyondellBasell’s recent earnings report history is mixed, as the company has beaten estimates twice and missed twice over the past four quarters.
Currently, LYB stock holds a consensus “Moderate Buy” rating among 19 analysts. Five recommend a “Strong Buy” while two suggest a “Moderate Buy.” Ten analysts propose a “Hold,” and two advocate a “Strong Sell” rating.
This analysis has remained consistent over the last three months.
On November 8, Piper Sandler Companies (PIPR) analyst Charles Neivert maintained an “Overweight” rating for the stock, though he lowered the price target to $112, indicating a potential upside of 35.3% from current levels. Additionally, the mean price target for LYB is $99.56, suggesting an upside of 20.2%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
