LyondellBasell Industries N.V. (LYB), headquartered in Houston, Texas, manufactures plastic, chemical, and fuel products. Valued at $31.59 billion by market cap, the company is one of the world’s largest producers of olefins and polyethylene and is the world’s second-largest producer of polypropylene. It develops, manufactures, and markets high-quality and innovative products for applications ranging from sustainable transportation and food safety to clean water and quality healthcare. The leading chemical company is expected to announce its fiscal second-quarter earnings for 2024 before the market opens on Friday, Aug. 2.
Ahead of the event, analysts expect LYB to report a profit of $2.32 per share on a diluted basis, down 4.9% from $2.44 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on one other occasion.
For fiscal 2024, analysts expect LYB to report EPS of $8.40, down 2.9% from $8.65 in fiscal 2023.
LYB stock has underperformed the S&P 500’s ($SPX) 15.4% gains on a YTD basis, with shares up 2% during this period. Similarly, it underperformed the US Basic Materials iShares ETF’s (IYM) 3.1% gains over the same time frame.
On Apr. 26, LYB reported its Q1 results. Its sales and other operating revenues declined 3.1% year-over-year to $9.93 billion. The company’s adjusted net income fell 39.1% year-over-year to $501 million, and its adjusted EPS stood at $1.53, representing a decrease of 38.8% year over year. Moreover, its adjusted EBITDA fell 26.8% over the prior year quarter to $1.06 billion.
The company expects seasonal demand improvements across most businesses in the second quarter. Low natural gas and NGL costs should enhance margins from its North American and Middle East production relative to higher oil-based costs in most other regions. As the summer driving season begins, the company expects oxyfuels and refining margins to rise with higher gasoline crack spreads and lower butane costs. LYB shares closed up more than 2% on the day the results were released but have been on a downtrend since then.
Analysts’ consensus opinion on LYB stock is bullish, with a “Moderate Buy” rating overall. Out of 18 analysts covering the stock, five advise a “Strong Buy” rating, two have a “Moderate Buy” rating, nine recommend a “Hold” rating, and two give a “Strong Sell.” The average analyst price target for LYB is $107.06, indicating a 10.4% potential upside from the current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
