LyondellBasell Industries NV may be undervalued with poor growth indicators, but the 21 analysts following the company give it an rating of hold. Their target prices range from $85.0 to $115.0 per share, for an average of $100.95. At today's price of $91.08, LyondellBasell Industries NV is trading -9.77% 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 13.0, compared to an average of 22.19 for the Industrials sector. Considering its EPS guidance of $9.53, the company has a forward P/E ratio of 9.6.
The average compound growth rate of the company's historical and projected earnings per share is -3.3%. On this basis, the company's PEG ratio is -4.09, which indicates that its shares are 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 2.24. In comparison, the sector average P/B ratio is 4.06. The company's shares are currently 13.8% above their Graham number, which suggests that they are not trading at a fair value in terms of earnings and net assets.
The question is, why does LyondellBasell Industries NV have a bad rating if it is apparently undervalued in terms of traditional metrics? One reason could be the company's disappointing rate of margin growth, which in the analysts' opinion, will continue in coming years.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $39,004 | $34,727 | $27,753 | $46,173 | $50,451 | $42,265 |
| Revenue Growth | n/a | -10.97% | -20.08% | 66.37% | 9.27% | -16.23% |
| Operating Margins | 14% | 12% | 6% | 15% | 10% | 8% |
| Net Margins | 12% | 10% | 9% | 12% | 8% | 5% |
| Net Income (MM) | $4,698 | $3,404 | $2,580 | $5,623 | $3,894 | $2,295 |
| Net Interest Expense (MM) | $360 | $347 | $526 | $519 | $287 | $441 |
| Depreciation & Amort. (MM) | $1,241 | $1,312 | $1,385 | $1,393 | $1,267 | $1,488 |
| Earnings Per Share | $12.01 | $9.58 | $4.24 | $16.75 | $11.81 | $6.99 |
| EPS Growth | n/a | -20.23% | -55.74% | 295.05% | -29.49% | -40.81% |
| Free Cash Flow (MM) | $3,366 | $2,267 | $1,457 | $5,736 | $4,229 | $3,522 |
| Capital Expenditures (MM) | $2,105 | $2,694 | $1,947 | $1,959 | $1,890 | $1,520 |
| Current Ratio | 1.92 | 1.83 | 2.11 | 1.69 | 1.75 | 1.89 |
| Total Debt (MM) | $9,387 | $12,062 | $15,957 | $11,614 | $11,321 | $11,656 |
| Net Debt / EBITDA | 1.38 | 2.06 | 4.82 | 1.24 | 1.44 | 1.87 |
