LYB
LyondellBasell
Cyclical Commodities
★ Quality 13/100Price today
$62.80
what the market pays
Worth
$46.21
calculated cycle value
Price is 36% above its value
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Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
How many times the cash flow
Cyclical Commodities · vs 6 peers
You pay 8.5x times this business's cash flow; its sector median is 18x.
18% above what Charlie thinks it's worth (7x) — you're overpaying, sector or no sector.
Why Overvalued?
The model estimates an intrinsic value of $46.21 per share. Today's price of $62.80 is 26% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 36% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $43.90.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$36.97
-20% off Value
🟡 Discounted
≤$43.90
-5% off Value
🔴 Today
$62.80
-26% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Refines cheap Gulf ethane into plastic; lives and dies by the spread.
LyondellBasell produces polyolefins, propylene oxide, and base chemicals that end up in packaging, auto parts, and construction materials. It charges by volume sold on a margin that depends on the spread between naphtha or ethane and the price of the polymer. It booked $30.2B in 2025 with a gross margin of just 9%.
Its edge is scale and access to cheap ethane on the Gulf Coast, which makes cracking cheaper than European rivals tied to naphtha. It's a cost advantage, not a brand one: the customer buys the molecule, not the logo. When the cycle flips, that advantage evaporates along with the spreads.
Revenue history
From $50.5B to $27.2B in 4 years. Sales are shrinking — the engine is losing steam.
Catalysts and risks
Wrap-up of the divestiture program in Europe announced for 2025-2026, cutting low-margin assets.
Recovery of the ethylene-ethane spread if new Chinese capacity stops flooding the market toward 2026.
Dividend held near $5.40/share; a cut or confirmation will mark the cycle's floor.
Net income at zero and FCF of only $0.4B against $12.1B in debt: little cushion if the cycle worsens.
Chinese overcapacity in polyolefins pressures global prices with no clear date for relief.
The current dividend isn't covered by normalized flow; its sustainability depends on cash, not earnings.
Charlie's note
“A cyclical chemical company with a cost moat, not a brand one: at 6.96x earnings and volumes falling 10% with a 9% gross margin, the low multiple is the fair price of a business whose advantage evaporates when the spread closes. Patience, and only step in when the cycle spits out fear.”
Analysis · June 2026
So when would be a good price for LyondellBasell?
By our calculation, not yet. We will email you the day it drops to $43.90 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.