Low Price-to-Sales Ratio
Reasonable P/E Ratio
Strong Return on Equity
Decent Operating Profit Margin
Strong Current Ratio
Interest Coverage Ratio
🏆 Strong Safety Performance
💰 Robust Cash Generation
📈 Strategic Growth Initiatives
🌱 Growing Circular and Low-Carbon Solutions
🔮 Positive Demand Recovery Signals
Relatively High EV/EBITDA
Low Net Profit Margin
Elevated Debt Levels
Lower Cash Ratio
⚠️ Market Challenges
📉 Structural Industry Challenges
Overall, LyondellBasell demonstrates a solid business model with strong operational metrics and strategic initiatives in place. However, they face significant market challenges that could impact future performance. The growth of their CLCS segment presents a positive outlook for the future, but structural industry issues remain a concern.
Analysis Date: January 31, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$161.94
Current Market Price: $57.70
IV/P Ratio: 2.81x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
64.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for LYB
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (13.78)
P/B ratio ≤ 1.5 (1.51)
Current ratio ≥ 2.0 (1.83x)
Long-term debt < Net current assets (2.15x)
Margin of safety (64.0%)
LYB does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
A return on equity of 10.39% shows that the company is efficiently generating profits from its equity, which is a positive indicator of management effectiveness.
The operating profit margin of 4.29% suggests that LYB is capable of managing its operations effectively, allowing it to retain a portion of revenue as profit.
The net profit margin of 3.39% indicates that the company is only able to convert a small portion of its revenue into actual profit, which could raise concerns about overall profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
10.39%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
-1.67%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
11.09%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
3.39%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
A current ratio of 1.83 indicates that LYB has more current assets than current liabilities, suggesting good liquidity and ability to cover short-term obligations.
With an interest coverage ratio of 3.60, LYB demonstrates a strong ability to meet its interest obligations, indicating a healthy financial position.
The debt-to-equity ratio of 1.04 suggests that LYB is utilizing a significant amount of debt to finance its operations, which could pose a risk if earnings decline.
A cash ratio of 0.50 indicates that the company may not have enough cash to cover all current liabilities, which could create liquidity concerns in adverse situations.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.03x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.83x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
LyondellBasell achieved a remarkable total recordable injury rate of 0.13 in 2024, indicating their commitment to safety and operational excellence. This focus on safety is essential for maintaining high reliability and creating shareholder value.
The company generated $3.8 billion in cash from operations with a 90% cash conversion ratio, showcasing strong cash flow management and financial health.
LyondellBasell has unlocked approximately $1.3 billion of incremental normalized EBITDA through strategic initiatives, emphasizing their ability to execute and adapt to market conditions.
The company faces significant headwinds in the petrochemical sector, with fourth quarter industry margins at about 60% of historical averages, reflecting a prolonged downturn and structural shifts in the industry.
LyondellBasell's Circular and Low-Carbon Solutions (CLCS) business is growing rapidly, with a target of $1 billion of incremental EBITDA from 2 million tons of annual volumes by 2030, capitalizing on rising demand for recycled plastics.
Early signs of recovery in key markets, particularly in North America, indicate potential growth opportunities as demand for polyolefins begins to rebound.
Ongoing structural shifts, such as slower global growth and regulatory impacts, may moderate future mid-cycle margins, presenting a challenge for growth prospects.