Nomura Securities Downgrades LyondellBasell Industries (LYB) to Neutral

Nomura Securities downgraded LyondellBasell Industries (NYSE: LYB) from Buy to Neutral with a price target of $89.00.

Analyst Aleksey Yefremov commented, "We downgrade LyondellBasell from Buy to Neutral as we see key commodity products (ethylene/polyethylene) and key feedstock (ethane) approaching peak conditions in 2016. Specifically, we are concerned about: Additions of ethylene and PE capacity globally will outstrip demand in 2016-18. As a result, we see ethylene utilization falling by 3-4% and PE by 5% through 2018/2019. Ethylene/PE margins in Asia are at a 9-year high, and return to cycle average could mean $0.10-0.20/lb downside vs. $0.29/lb today. Higher capacity in N. America will likely result in lower domestic PE price premium vs. Asian markets. As regional PE capacity grows by 30% in 2015-18, we see PE premium shrinking ~$0.05/lb from recent $0.08-0.10/lb."

The firm adjusted FY16E EPS from $9.50 to $9.60; FY17E EPS from $8.90 to $9.46.

For an analyst ratings summary and ratings history on LyondellBasell Industries click here. For more ratings news on LyondellBasell Industries click here.

Shares of LyondellBasell Industries closed at $89.64 yesterday.

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