LyondellBasell (NYSE:LYB) Valuation: Assessing Recovery Potential After Weak Earnings and Management’s Upbeat Outlook

LyondellBasell Industries (NYSE:LYB) reported weaker third-quarter results, with sales and profit dropping year over year. Despite these figures, management signaled optimism for the fourth quarter, citing improving profitability and recovering demand ahead.

See our latest analysis for LyondellBasell Industries.

LyondellBasell’s stock has struggled this year, with a sharp drop in investor sentiment following the reported net loss and falling sales. This has led to a 1-year total shareholder return of -45.37%. Short-term momentum has faded as well, with recent declines adding to a challenging longer-term trend for the company.

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Following such a tough year and with management hinting at brighter prospects ahead, the question now is whether LyondellBasell stock is trading at a discount or if the market is already expecting a turnaround in future growth.

Most Popular Narrative: 22.2% Undervalued

Compared to the last close of $42.77, the most popular valuation narrative sets LyondellBasell’s fair value at $55. This suggests substantial upside if these assumptions hold. This sentiment diverges sharply from the company’s recent stock performance and sets a bold context for further scrutiny of underlying drivers.

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.

Read the complete narrative.

What’s behind this double-digit discount to the market price? The narrative hinges on a big improvement in margins, driven by aggressive moves into sustainable plastics and a focus on high-growth regions. Want to see the full financial blueprint and the high-stakes predictions that could send shares sharply higher? Find out what the consensus is really forecasting and how those bets could play out.

Result: Fair Value of $55 (UNDERVALUED)

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

However, persistent industry overcapacity or major delays in LyondellBasell’s recycling investments could present challenges to forecasts for rebounds in margins and earnings growth.

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 draw your own conclusions from the latest numbers, building a custom story takes just a few minutes, so why not 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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