On Thursday, Citi analyst Pat Cunningham adjusted the price target for LyondellBasell Industries (NYSE: NYSE:LYB) shares to $78 from the previous $81, while maintaining a Neutral rating on the stock. According to InvestingPro data, analyst targets for LYB range from $75 to $115, with the stock currently trading at $77.08. The company appears undervalued based on InvestingPro’s Fair Value analysis. The revision follows a decrease in the fourth-quarter 2024 EBITDA forecast by approximately $12 million to $763 million, which is attributed to lower expectations in the Intermediates & Derivatives (I&D) segment and a slight reduction in the Olefins & Polyolefins (O&P) Americas segment.
The analyst noted a corresponding reduction in the fourth-quarter 2024 earnings per share (EPS) estimate, which is now set at $0.74, a 3 cent decrease from earlier predictions. Despite these adjustments, the full-year 2025 price estimates for the O&P Americas segment remain unchanged. However, the cash margin estimate for this segment has been marginally reduced by 1 cent.
For the O&P Europe, Asia, and International (EAI) segment, both the price and cash margin estimates have been maintained. On the other hand, the I&D fourth-quarter 2024 EBITDA forecast has been lowered by roughly $10 million. This change also leads to slight downward adjustments for the 2025 projections, reflecting updated price estimates for propylene glycol (PG), styrene, and methyl tert-butyl ether (MTBE), as well as a revised capacity assumption for propylene oxide (PO) and its derivatives.
Cunningham concluded with an expectation that a recovery in consumer durables demand would benefit LyondellBasell’s PO and polypropylene (PP) businesses. This outlook suggests a potential upside for the company’s segments that are tied to these consumer markets. With a notable dividend yield of 6.95% and strong cash flow metrics, LYB presents interesting opportunities for investors. For deeper insights into LYB’s financial health and growth prospects, including exclusive ProTips and comprehensive analysis, check out the full research report available on InvestingPro.
In other recent news, LyondellBasell Industries reported third-quarter earnings per share of $1.88 and an EBITDA of $1.2 billion. Several financial firms, including Citi, BMO Capital Markets, Piper Sandler, BofA Securities, and Jefferies, have adjusted their price targets for the company, following these results. RBC, however, maintains an Outperform rating on LyondellBasell, highlighting its appealing 6.43% dividend yield. Furthermore, the company has announced a CFO transition set for 2025, with Agustin Izquierdo slated to succeed the current CFO, Michael McMurray.
In addition to these developments, LyondellBasell’s strategic initiatives, such as the construction of the MoReTec-1 recycling facility and the planned closure of the Houston refinery, are proceeding as planned. The company aims to unlock at least $600 million in annual EBITDA by the end of 2024, with a target of $1 billion by the end of 2025. Piper Sandler, in its analysis, suggests a more gradual recovery for LyondellBasell’s major products, largely due to a weaker-than-anticipated rebound in Europe and Asia. These are some of the recent developments in the company.
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