LyondellBasell (LYB): Assessing Valuation After Q3 Earnings Beat and Cost-Cutting Progress

LyondellBasell Industries (NYSE:LYB) just posted its third-quarter results, and the story is a bit more dynamic than the headline numbers suggest. The company reported a beat on both adjusted earnings and revenue, outperforming estimates during a tough quarter.

See our latest analysis for LyondellBasell Industries.

Shares of LyondellBasell Industries have struggled over the past year, with a 1-year total shareholder return of -40.2% and the stock now near $46. While the latest earnings beat and decisive cost cuts are helping rebuild investor confidence, long-term sentiment remains cautious given persistent industry challenges and last week’s sharp price drop. Short-term momentum is still muted, but the groundwork for recovery is being laid, particularly as the company progresses with asset sales and reinforces its dividend story.

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With the stock trading at a sizable discount to analyst targets and valuation screens signaling possible upside, the key question now is whether LYB’s future rebound is underappreciated or if the market already anticipates the turnaround story.

Most Popular Narrative: 18.6% Undervalued

Based on the prevailing narrative, LyondellBasell Industries is trading well below its estimated fair value, with a notable gap between the last close and the consensus view. This sets up a potentially compelling opportunity for those looking beyond current market skepticism.

Ongoing portfolio optimization through discipline in capital allocation, deferred capital projects (like Flex-2), targeted cost reductions, and working capital improvements is projected to generate at least $1.1 billion incremental cash flow by 2026. This will strengthen free cash flow and support dividends even during downturns.

Read the complete narrative.

What’s powering this undervaluation call? Hint: The financial model behind this number hinges on radical profit growth and specific long-term margin targets. The big twist is how future cash generation and bold cost actions could shape the next chapter. Which of these numbers tip the scales for the fair value? Dive in and find out what the real verdict is on LYB’s rebound story.

Result: Fair Value of $57 (UNDERVALUED)

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

However, a prolonged industry downturn or delays in key investment projects could derail the rebound story and keep valuations under pressure.

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

Build Your Own LyondellBasell Industries Narrative

If you see things differently or want to dive deeper, you can dig into the numbers yourself and shape your own perspective quickly. Do it your way

A great starting point for your LyondellBasell Industries research is our analysis highlighting 3 key rewards and 3 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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