LYB changes
Pick any two versions below to diff them.
- Price
- $64.01 → $62.58(−2.2%)
- Discount category
- Close to intrinsic value → Below intrinsic value
- Next earnings
- Oct 30, 2026 → Jan 30, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices LyondellBasell for a long downturn in petrochemicals. In 2025, polymer margins were low: EPS excluding identified items was only $0.95 in the first half of 2025, and the company cut its quarterly dividend in February 2026 to $0.69 per share. In Q2 2026, a conflict in the Middle East reduced global supply, and margins rose fast: EPS excluding identified items was $4.30. added: In Q3 2026, polymer prices fell and EPS excluding identified items was $2.54, but oxyfuels margins stayed strong. Investors fear that these profits are temporary and that margins fall again when the lost supply returns, which the company expects to continue into 2027. For the gap to close, three things must be true. The Cash Improvement Plan must give $500 million of extra cash by the end of 2026, as planned. The company must use the strong 2026 cash flow to lower its debt. Margins must stay above the 2025 level after the Middle East supply returns, helped by the sale of the high-cost European sites. The removed: Q3 2026 report on October 30, 2026 and the Q4 2026 removed: report added: report, expected in removed: early 2027 give added: late January 2027, gives the next removed: evidence. added: evidence, with the result of the Cash Improvement Plan. The gap closes slowly, over two to three years, because it depends on the industry cycle. The main reason it may not close is that margins fall back to the 2025 level after the supply disruption ends.
- Risks
- The strong Q2 2026 margins came from a supply disruption in the Middle East. When that supply returns, margins can fall back to the low levels of 2025. Prices can change fast. In July 2026, the company said that uncertainty about near-term prices could for a time change the normal buying patterns of its customers, which can lower volumes. Unplanned outages can lower volumes. The Bayport PO/TBA plant had an unplanned outage in Q2 2026 and restarted in June, and added: a planned removed: downtime added: maintenance project at removed: the Clinton facility added: a North American polypropylene plant lowers removed: polyolefins volumes in removed: the second half of added: Q4 2026. The company recognized impairments of $89 million in the first half of 2026, including $74 million for a plastic waste sorting facility in Houston. More write-downs are possible in its circular and low-carbon projects.
- Balance sheet
- Cash: removed: $2.6B added: $3.2B Debt: removed: $12.9B added: $12.3B Net debt: removed: $10.3B added: $9.1B Interest cover: removed: 6.5× added: 6.9× Undrawn credit line: $3.8B, to July 2029 Debt due within 12 months: removed: $1.7B added: $1.1B At removed: June added: September 30, 2026, added: total debt was removed: $12.91 billion: long-term debt of $11.22 added: $12.33 billion, added: including current maturities of removed: $1.46 billion added: $891 million and short-term debt of removed: $234 added: $247 million. The amount due within 12 months includes the current maturities and the short-term debt. added: In September 2026, the company repaid a €500 million note as planned. Cash was removed: $2.63 added: $3.23 billion, and available liquidity was removed: $7.1 added: $7.7 billion. There were no borrowings under the $3.75 billion revolving credit facility, which expires in July removed: 2029. added: 2029, and no commercial paper. Interest cover is operating income divided by interest expense for the first removed: half added: nine months of removed: 2026, which added: 2026. The revolving credit facility restricts share repurchases, except to offset dilution, and the removed: strong Q2 2026 margins raised. added: company bought no shares in the first nine months of 2026. The quarterly dividend is $0.69 per share since February 2026. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 30, 2026: Q3 2026 earnings: margins. removed: Pending. added: Passed. Watch: Margins that stay well above the 2025 level and strong cash flow pass; a fast return to 2025 margins fails. added: Outcome: EPS excluding identified items was $2.54, against $1.01 in Q3 2025, and cash from operations was $1.7 billion, although margins fell from Q2 2026. Jan added: 30, 2027 (estimate): added: Q4 2026 earnings: margins after the supply disruption. Pending. Watch: EBITDA excluding identified items well above the Q4 2025 level and lower net debt pass; a return to 2025 margins fails. Jan 2027 (estimate): Cash Improvement Plan result. Pending. Watch: A confirmed $500 million of extra cash in 2026 and lower debt pass; a shortfall against the plan fails.
- Recent events
- added: Oct 30, 2026: LyondellBasell reported Q3 2026 results. Net income was $758 million, or $2.32 per diluted share, and $2.54 per share excluding identified items, down from $4.30 in Q2 2026. EBITDA excluding identified items was $1.5 billion. Polymer prices fell in both olefins and polyolefins segments, but Intermediates & Derivatives earned much more because oxyfuels margins were strong. Cash from operations was $1.7 billion, and the company repaid a €500 million note in September. For Q4 2026, it expects operating rates of 85% for North American olefins and polyolefins, 60% for Europe and 75% for intermediates and derivatives. Oct 29, 2026: LyondellBasell agreed to sell Houston Refining, L.P., which owns the former Houston refinery site and related assets, to a subsidiary of Valero Energy for $320.5 million. It expects the sale to close in Q4 2026. Jul 31, 2026: LyondellBasell reported Q2 2026 results. Net income was $559 million, or $1.71 per diluted share, and $4.30 per share excluding identified items. Polymer margins rose because the conflict in the Middle East reduced global supply. Cash from operations was $752 million, and cash was $2.6 billion. For Q3 2026, the company expects operating rates of 85% for North American olefins and polyolefins, 70% for Europe and 85% for intermediates and derivatives. May 29, 2026: LyondellBasell extended its accounts receivable facility to June 25, 2027 and reduced its maximum amount from $900 million to $700 million. May 22, 2026: Shareholders approved a new authorization to repurchase up to 34.0 million shares through November 22, 2027. The company did not repurchase shares in the first half of 2026. May 1, 2026: LyondellBasell completed the sale of its olefins and polyolefins sites in Berre l'Etang (France), Münchsmünster (Germany), Carrington (United Kingdom) and Tarragona (Spain). It recognized a pre-tax loss of $734 million, which includes a cash contribution of $310 million to the businesses at closing.