Reassessing LyondellBasell Industries (NYSE:LYB) Valuation After Fermium’s Downgrade and Deep Discount Signals
LyondellBasell Industries (NYSE:LYB) just caught investors attention after Fermium Research shifted the stock to Hold, citing weak demand, rising costs, and stiffer competition, even as management leans on cash generation and a hefty yield.
See our latest analysis for LyondellBasell Industries.
The downgrade lands after a bruising stretch for LyondellBasell, with the share price down sharply on a year to date basis and multiyear total shareholder returns still negative. This suggests momentum has clearly faded despite management’s long term cash flow ambitions.
If this kind of cyclical pressure has you reassessing materials exposure, it might be a good moment to contrast LYB’s setup with fast growing stocks with high insider ownership.
Yet with LYB now trading at a steep discount, boasting a double digit forward yield and expectations of an earnings rebound from 2026, is this punished chemical giant mispriced value, or simply reflecting all the growth still to come?
Most Popular Narrative: 17.5% Undervalued
With LyondellBasell Industries closing at $44.39 against a narrative fair value near $53.78, the story leans toward mispriced pessimism rather than peak exuberance.
LyondellBasell's strategic investments in circular and advanced recycling (MoReTec-1 and plans for MoReTec-2, plus expanding renewable feedstock capacity in Europe) position the company to benefit from rising regulatory and consumer demand for recycled and sustainable plastics, improving product mix and supporting higher net margins and long-term revenue growth.
Curious how shrinking revenues can still underpin rising profits, fatter margins, and a surprisingly modest future earnings multiple? The narrative connects those moving parts in a way the current share price clearly does not.
Result: Fair Value of $53.78 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that mispricing hinges on execution, and a prolonged petrochemical downturn or delays to key recycling projects could quickly erode the upside case.
Find out about the key risks to this LyondellBasell Industries narrative.
Build Your Own LyondellBasell Industries Narrative
If you are not fully aligned with this view, or would rather dive into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.
A great starting point for your LyondellBasell Industries research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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