Barclays Maintains an 'Overweight' on LyondellBasell Industries (LYB); Key Takeaways From LYB's Investor Day
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Price: $63.76 +2.18%
Rating Summary:
14 Buy, 15 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 15 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Overweight' on LyondellBasell Industries (NYSE: LYB) price target of $43.00.
Barclays analyst says, "LYB's investor day reinforced many of the points that make it the most interesting investment opportunity in our universe. There was nothing in the presentation that should have surprised investors. We think the three main points were: 1) Trough EBITDA and FCF is structurally higher than in 2009...2) The opportunity set is still better at LYB than at peers. A) Growth projects have higher-than-expected returns. LYB laid out a series of investments that at the midpoint would provide a greater than 50% EBT return on capital spent ($900mn vs. $1,400mn spend). B) Cost-cutting programs are at an earlier stage than peers and should provide a greater relative benefit...3) The relative valuation discount to peers is not justified. LYB laid out a case that its financial performance, future earnings power and quality asset base does not deserve as wide of a valuation discount to its peers...4) Near-term consensus will probably come down. Since LYB reported Q3 results its refining business spread has come under pressure and also its commodity olefin spreads have weakened as well, prompting us to reduce our Q4'11 EPS from 90 c/sh to 82 c/sh. and '12 from $.4.75 to $4.70. It should not affect Q2 onwards."
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 $32.62 yesterday.
Barclays analyst says, "LYB's investor day reinforced many of the points that make it the most interesting investment opportunity in our universe. There was nothing in the presentation that should have surprised investors. We think the three main points were: 1) Trough EBITDA and FCF is structurally higher than in 2009...2) The opportunity set is still better at LYB than at peers. A) Growth projects have higher-than-expected returns. LYB laid out a series of investments that at the midpoint would provide a greater than 50% EBT return on capital spent ($900mn vs. $1,400mn spend). B) Cost-cutting programs are at an earlier stage than peers and should provide a greater relative benefit...3) The relative valuation discount to peers is not justified. LYB laid out a case that its financial performance, future earnings power and quality asset base does not deserve as wide of a valuation discount to its peers...4) Near-term consensus will probably come down. Since LYB reported Q3 results its refining business spread has come under pressure and also its commodity olefin spreads have weakened as well, prompting us to reduce our Q4'11 EPS from 90 c/sh to 82 c/sh. and '12 from $.4.75 to $4.70. It should not affect Q2 onwards."
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 $32.62 yesterday.
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