Key Points:
- UBS downgrades LyondellBasell Industries to a "Sell" rating due to a challenging demand outlook in the chemical sector.
- Analysts note significant overcapacity and rising costs that are straining earnings.
- Consensus among analysts suggests holding LYB, with varying price targets indicating potential upside.
UBS Downgrades LyondellBasell Industries: Analyzing the Implications
UBS has issued a downgrade for LyondellBasell Industries (NYSE:LYB), moving its rating to "Sell." This decision reflects a pessimistic outlook on the chemical sector, particularly highlighting a bleak demand environment. Analysts point to ongoing global overcapacity and mounting operational costs that are likely to squeeze earnings further. UBS has adjusted its 2025 and 2026 EBITDA forecasts downward by over 10%, citing a weakening pricing power in essential markets like polyethylene and polypropylene.
Wall Street Analysts Forecast
According to data from 21 analysts, the average one-year price target for LyondellBasell Industries NV (LYB, Financial) stands at $81.20, with individual estimates ranging from a high of $105.00 to a low of $63.00. This average target suggests a potential upside of 43.05% from LYB's current market price of $56.76, providing significant room for growth in the eyes of analysts. For a detailed breakdown of these estimates, you can visit the LyondellBasell Industries NV (LYB) Forecast page.
Brokerage Recommendations and GF Value Estimate
The consensus recommendation among 24 brokerage firms places LyondellBasell Industries NV (LYB, Financial) at an average rating of 2.8, which translates to a "Hold" status on the assessment scale. This scale ranges from 1, indicating a "Strong Buy," to 5, denoting a "Sell." This middle-ground rating suggests cautious optimism amid current market conditions.
In terms of valuation, GuruFocus provides an estimated GF Value for LYB over the next year at $67.81. This estimate forecasts a potential upside of 19.47% from its present trading price of $56.76. The GF Value is calculated based on historical trading multiples, past business growth, and projections for future performance. For further details, investors can refer to the LyondellBasell Industries NV (LYB, Financial) Summary page.
