Dow (DOW), LyondellBasell (LYB) Estimates Raised at Jefferies

Jefferies analyst Laurence Alexander raised estimates on Buy-rated Dow (NYSE: DOW) and LyondellBasell Industries (NYSE: LYB) given the surge in crude oil price which will drive wider margins for ethane-based chemicals.

Alexander said the margins should more than offset the risks from margin compression in EU & Asian petrochemicals this summer and near-term demand headwinds.

Despite the positive comments, the analyst said shares could remain "range-bound" until the demand outlook improves, given the significant downside risks in the event of a global recession.

For DOW, the firm is increasing 2022E EBITDA by 5% (+$480m) to $10.5bn and EPS by 8% to $7.05.

For LYB, the firm is lifting 2022E EBITDA by 4.5% (+$350m) to $8.3bn and EPS by 6% to $16.15 (from $15.25).

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