In a report released today, Steve Byrne from Bank of America Securities reiterated a Hold rating on LyondellBasell (LYB – Research Report), with a price target of $56.00.
Steve Byrne’s rating is based on a combination of factors that reflect the current challenges and opportunities facing LyondellBasell. The company is navigating a difficult period for commodity chemical companies, with projected 2025 EBITDA expected to hit a record low. This is compounded by broader economic slowdowns and the impact of tariffs affecting demand, particularly in China. Despite these challenges, LyondellBasell maintains a strong balance sheet with sufficient cash reserves and manageable capital expenditures, providing some financial flexibility.
Furthermore, while there is a significant shortfall in dividend coverage anticipated, the company plans to continue growing its distribution, supported by a solid dividend yield of 9.2%. The recent weak earnings in the first quarter, partly due to operational disruptions, are expected to improve in the subsequent quarter. However, the overall outlook remains cautious, leading to a Hold rating as the company works through these headwinds and positions itself for future growth.
In another report released on May 1, Barclays also maintained a Hold rating on the stock with a $62.00 price target.