Is Wall Street Misjudging LyondellBasell Industries NV (LYB) Stock?

LyondellBasell Industries NV may be undervalued with poor growth indicators, but the 24 analysts following the company give it an rating of hold. Their target prices range from $75.0 to $121.0 per share, for an average of $98.56. At today's price of $88.57, LyondellBasell Industries NV is trading -10.14% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. Based in Houston, TX, the large-cap Industrials company has 19,300 full time employees. LyondellBasell Industries NV has provided a 5.3% dividend yield over the last 12 months.

LyondellBasell Industries NV has a trailing twelve month P/E ratio of 9.6, compared to an average of 20.49 for the Industrials sector. Based on its EPS guidance of 10.66, the company has a forward P/E ratio of 8.3.

The average compound growth rate of the company's historical and projected earnings per share is 2.2%. On this basis, the company's PEG ratio is 4.58, which suggests that it is overpriced.

On the other hand, the market is potentially undervaluing LyondellBasell Industries NV in terms of its book value because its P/B ratio is 2.27. In comparison, the sector average P/B ratio is 3.78. The company's shares are currently -5.4% below their Graham number, indicating that its shares have a margin of safety.

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $34,727 $27,753 $46,173 $50,451
Gross Margins 15.6% 12.2% 19.0% 13.1%
Operating Margins 11.8% 7.7% 16.0% 10.2%
Net Margins 9.76% 5.12% 12.12% 7.69%
Net Income (MM) $3,390 $1,420 $5,596 $3,882
Net Interest Income -$328,000 -$514,000 -$510,000 -$258,000
Depreciation & Amort. -$1,312,000 -$1,385,000 -$1,393,000 -$1,267,000
Earnings Per Share $9.58 $4.24 $16.75 $9.27
EPS Growth n/a -55.74% 295.05% -44.66%
Diluted Shares (MM) 353 334 334 325
Free Cash Flow (MM) $2,267 $1,457 $5,736 $4,229
Capital Expenditures (MM) -$2,694 -$1,947 -$1,959 -$1,890
Net Current Assets (MM) -$12,862 -$15,781 -$12,653 -$11,891
Current Ratio 1.83 2.11 1.69 1.75
Long Term Debt (MM) $11,614 $15,286 $11,246 $10,540
Net Debt / EBITDA 2.02 4.43 1.21 1.51
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.