What Does LyondellBasell Industries N.V.'s (NYSE:LYB) Share Price Indicate?

July 13, 2020

Today we're going to take a look at the well-established LyondellBasell Industries N.V. (NYSE:LYB). The company's stock saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on LyondellBasell Industries’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for LyondellBasell Industries

Is LyondellBasell Industries still cheap?

Great news for investors – LyondellBasell Industries is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $103.65, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because LyondellBasell Industries’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of LyondellBasell Industries look like?

future-profit — NYSE:LYB Past and Future Earnings July 14th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of LyondellBasell Industries, it is expected to deliver a relatively unexciting earnings growth of 3.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since LYB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on LYB for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LYB. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on LyondellBasell Industries. You can find everything you need to know about LyondellBasell Industries in the latest infographic research report. If you are no longer interested in LyondellBasell Industries, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. 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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