LyondellBasell Industries N.V. LYB
Verdict: Sell. Fair value $42.89 against a price of $45.59 on 6 Jan 2026, 6% below the price.
In plain words
The case for: Narrow competitive moat provides durability.
The case against: Competitive moat at risk of erosion. Intense competitive pressure could compress margins. Net Income has collapsed from $5.61B in 2021 to $1.36B in 2024, a 76% decline. Similarly, Revenue....
Main risks
- Collapsing Profitability and Growth: Revenue, Net Income, and FCF have declined precipitously from 2022 highs, with TTM figures showing further sharp deceleration, indicating severe cyclical pressure.
- Negative Return on Incremental Capital (ROIIC): The estimated 3-year ROIIC is deeply negative (-469%), suggesting capital allocated since the 2021 peak has significantly destroyed shareholder value as the cycle turned.
- Elevated Leverage in a Downturn: Debt-to-Equity is over 1.0 and Net Debt/EBITDA is estimated at a high 3.4x. This level of debt is concerning when earnings and cash flow are shrinking, increasing financial risk.
- Net Income has collapsed from $5.61B in 2021 to $1.36B in 2024, a 76% decline. Similarly, Revenue...
- While the OCF/Net Income ratio is strong, the absolute Operating Cash Flow has declined...
- Intense competitive environment