LyondellBasell (LYB) Industries delivered mixed Q3 2021 results amid robust demand for products and tight market conditions. Revenue exceeded estimates but EPS missed, as the company lost volume and incurred higher costs in its acetyls business. LYB shares fell 3.65% to close at $92.82 on October 29.
LyondellBasell Industries is one of the largest plastics chemicals and refining companies. It produces polypropylene compounds and licenses polyolefin technologies. Its products are commonly used in automotive parts, electronics, packaging, construction materials, and biofuels.
Sales and other operating revenues in Q3 landed at $12.70 billion, compared to $6.78 billion delivered the same quarter last year, and above consensus estimates of $11.38 billion. Net income, on the other hand, landed at $1.76 billion, compared to $114 million delivered in the same quarter last year. (See Top Smart Score Stocks on TipRanks)
LyondellBasell posted diluted EPS of $5.25, up from $0.33 delivered the same quarter last year. However, it missed consensus estimates of $5.75. During the quarter, the company redeemed $500 million in bonds, bringing debt reduction to $2.4 billion year-to-date. It also repurchased 1 million shares.
The company expects strong demand for its products going forward, as vaccine rollouts continue to drive improvement in economic activity worldwide. Management also expects unmet consumer demand to strengthen the automotive, construction and other durable goods markets. The company also expects cash generation to provide more flexibility for share repurchases.
In addition, LyondellBasell has reaffirmed its commitment to addressing global challenges of climate change by reducing CO2 emissions and achieving carbon neutrality.
Recently, Bank of America Securities analyst Steve Byrne reiterated a Hold rating on the stock and lowered the price target to $109 from $114, implying 17.43% upside potential to current levels.
Consensus among analysts is a Moderate Buy, based on 6 Buys and 3 Holds. The average LyondellBasell price target of $120.25 implies 29.55% upside potential to current levels.
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