LyondellBasell Industries (NYSE:LYB): Revisiting Valuation After $1.5 Billion Debt Raise and Third Quarter Net Loss

LyondellBasell Industries (NYSE:LYB) recently raised $1.5 billion through two debt offerings, just as it reported a third quarter net loss due to non-cash asset write-downs and other charges. This combination of fundraising and financial strain is drawing investor attention back to the stock.

See our latest analysis for LyondellBasell Industries.

LyondellBasell’s recent string of debt offerings and a tough quarterly loss come against a backdrop of sharp share price pressure, with a 1-year total shareholder return of -43.2% and a year-to-date share price return now at -40.2%. While the market appeared to welcome the fundraising move with a brief bump, momentum has faded as worries mount about profitability and long-term balance sheet strength.

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The sharp decline in LyondellBasell’s share price and mounting financial pressures raise an important question for investors: is the current valuation a rare bargain in disguise, or are markets already factoring in weak growth ahead?

Most Popular Narrative: 20.8% Undervalued

The most widely followed narrative values LyondellBasell Industries stock at a notable premium to its last close, implying meaningful upside in today's market. This sets the framework for the optimism driving this valuation.

LyondellBasell's strategic investments in circular and advanced recycling (MoReTec-1 and plans for MoReTec-2, along with expanding renewable feedstock capacity in Europe) position the company to benefit from rising regulatory and consumer demand for recycled and sustainable plastics. These actions improve product mix and support higher net margins and long-term revenue growth.

Read the complete narrative.

Curious why this narrative hints at a leap in profit margins and a future earnings profile usually seen in sector leaders? Find out what bold projections for profitability and major margin expansion underlie this striking valuation. The story behind these numbers may surprise you.

Result: Fair Value of $55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a prolonged industry downturn or delayed investment in sustainable projects could easily derail these optimistic outlooks and further compress LyondellBasell’s earnings.

Find out about the key risks to this LyondellBasell Industries narrative.

Build Your Own LyondellBasell Industries Narrative

If you see the story differently or want to shape your own perspective, you can dive into the data and create your own narrative in just 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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