- Price
- $64.01
- Fair value
- $75.00
- Discount
- 14.7%
- Uncertainty
- High
- LSEG rating
- 2.86
- Moat
- Narrow
- Next earnings
- 2026-11-02
- Next earnings is estimate
- Yes
- Company name
- LyondellBasell
- Sector
- Chemicals & plastics
- About
- LyondellBasell is one of the largest makers of plastics and chemicals in the world. It makes olefins and polyolefins, such as polyethylene and polypropylene, and intermediates and derivatives, such as propylene oxide, oxyfuels and methanol. It also licenses its process technologies. Its plants in North America use low-cost natural gas liquids as feedstock, which gives them a cost advantage over many plants in Europe and Asia. The company left the refining business in 2025, and on May 1, 2026, it sold four European olefins and polyolefins sites in France, Germany, the United Kingdom and Spain. It is incorporated in the Netherlands and has its main offices in Houston and London.
- Thesis
- The market prices LyondellBasell for a long downturn in petrochemicals. In 2025, polymer margins were low: EPS excluding identified items was only $0.95 in the first half of 2025, and the company cut its quarterly dividend in February 2026 to $0.69 per share. In Q2 2026, a conflict in the Middle East reduced global supply, and margins rose fast: EPS excluding identified items was $4.30. Investors fear that these profits are temporary and that margins fall again when the lost supply returns, which the company expects to continue into 2027. For the gap to close, three things must be true. The Cash Improvement Plan must give $500 million of extra cash by the end of 2026, as planned. The company must use the strong 2026 cash flow to lower its debt. Margins must stay above the 2025 level after the Middle East supply returns, helped by the sale of the high-cost European sites. The Q3 2026 report, expected in late October or early November 2026, and the Q4 2026 report in early 2027 give the next evidence. The gap closes slowly, over two to three years, because it depends on the industry cycle. The main reason it may not close is that margins fall back to the 2025 level after the supply disruption ends.
- Risks
- The strong Q2 2026 margins came from a supply disruption in the Middle East. When that supply returns, margins can fall back to the low levels of 2025.
Prices can change fast. In July 2026, the company said that uncertainty about near-term prices could for a time change the normal buying patterns of its customers, which can lower volumes.
Unplanned outages can lower volumes. The Bayport PO/TBA plant had an unplanned outage in Q2 2026 and restarted in June, and planned downtime at the Clinton facility lowers polyolefins volumes in the second half of 2026.
The company recognized impairments of $89 million in the first half of 2026, including $74 million for a plastic waste sorting facility in Houston. More write-downs are possible in its circular and low-carbon projects.
- Balance sheet
- Cash: $2.6B
Debt: $12.9B
Net debt: $10.3B
Interest cover: 6.5×
Undrawn credit line: $3.8B, to July 2029
Debt due within 12 months: $1.7B
At June 30, 2026, debt was $12.91 billion: long-term debt of $11.22 billion, current maturities of $1.46 billion and short-term debt of $234 million. The amount due within 12 months includes the current maturities and the short-term debt. Cash was $2.63 billion, and available liquidity was $7.1 billion. There were no borrowings under the $3.75 billion revolving credit facility, which expires in July 2029. Interest cover is operating income divided by interest expense for the first half of 2026, which the strong Q2 2026 margins raised. The quarterly dividend is $0.69 per share since February 2026.
As of 2026-06-30.
- Checkpoints
- Nov 2, 2026 (estimate): Q3 2026 earnings: margins. Pending. Watch: Margins that stay well above the 2025 level and strong cash flow pass; a fast return to 2025 margins fails.
Jan 2027 (estimate): Cash Improvement Plan result. Pending. Watch: A confirmed $500 million of extra cash in 2026 and lower debt pass; a shortfall against the plan fails.
- Recent events
- 2026-07-31: LyondellBasell reported Q2 2026 results. Net income was $559 million, or $1.71 per diluted share, and $4.30 per share excluding identified items. Polymer margins rose because the conflict in the Middle East reduced global supply. Cash from operations was $752 million, and cash was $2.6 billion. For Q3 2026, the company expects operating rates of 85% for North American olefins and polyolefins, 70% for Europe and 85% for intermediates and derivatives.
2026-05-29: LyondellBasell extended its accounts receivable facility to June 25, 2027 and reduced its maximum amount from $900 million to $700 million.
2026-05-22: Shareholders approved a new authorization to repurchase up to 34.0 million shares through November 22, 2027. The company did not repurchase shares in the first half of 2026.
2026-05-01: LyondellBasell completed the sale of its olefins and polyolefins sites in Berre l'Etang (France), Münchsmünster (Germany), Carrington (United Kingdom) and Tarragona (Spain). It recognized a pre-tax loss of $734 million, which includes a cash contribution of $310 million to the businesses at closing.