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LyondellBasell (LYB) Announces Review of European Operations

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LyondellBasell Industries N.V. (LYB - Free Report) announced a strategic review of its European operations in the Olefins & Polyolefins and Intermediates & Derivatives business units. This review aligns with the company's strategic approach to grow and upgrade its core businesses, develop profitable circular and low-carbon solutions and enhance performance and culture.

LYB’s strategy, as outlined at the 2023 Capital Markets Day, focuses on businesses with enduring competitive advantages. It plans to reinvest in areas that consistently deliver high returns at a meaningful scale, a core aspect of the approach.

LyondellBasell's ongoing commitment to innovation continues with investments in the MoReTec plant, a technology designed to convert plastic waste into liquid raw materials, and the establishment of a circularity hub in Cologne, Germany. The company is also leveraging its advanced technology to strengthen and expand its core operations.

Investments are being prioritized to support the company's circularity and net-zero objectives. While this strategic review may create some uncertainty for employees and customers, LyondellBasell is dedicated to maintaining safe and reliable operations throughout the process.

The stock has gained 14.5% in the past year against the industry’s rise of 1.2%.

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LyondellBasell reported adjusted earnings of $1.53 per share in the first quarter, plunging 38.8% from $2.50 in the year-ago quarter. The company's net sales totaled $9,925 million, down 3.1% decrease from $10,247 million in the prior-year quarter.

In the second quarter, LYB expects seasonal demand to rise across most of its business segments, with North American and Middle Eastern production continuing to benefit from low-cost natural gas and NGLs compared to higher oil-based costs in other regions. As the summer driving season kicks off, the company foresees an increase in oxyfuel and refining margins due to wider gasoline crack spreads and lower butane costs. The company expects to meet market demand with global olefins and polyolefins assets operating at an average rate of 85%, while Intermediates & Derivatives assets will operate at 80%. It continues to implement targeted stimulus measures and keeps a close eye on potential demand growth in China.

 

Zacks Rank & Key Picks

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are ATI Inc. (ATI - Free Report) and Carpenter Technology Corporation (CRS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy), and Ecolab Inc. (ECL - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ATI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.34%. The company’s shares have soared 68.7% in the past year.

CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared 114.2%% in the past year.

The Zacks Consensus Estimate for Ecolab's current year earnings is pegged at $6.56 per share, indicating a year-over-year rise of 25.9%. The Zacks Consensus Estimate for ECL’s current-year earnings has been going up in the past 30 days. ECL beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.3%. The stock has rallied nearly 34.1% in the past year.

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