LyondellBasell (LYB) Target Lowered at BofA as Chemicals Outlook Stays Cautious

Company Overview - LyondellBasell Industries N.V. (NYSE:LYB) is a major global chemical producer, manufacturing plastics, chemicals, and refined fuels, and also licenses petrochemical technologies [6] Financial Performance - In Q3 2025, LyondellBasell reported better cash flow and significant fixed cost reductions despite challenging global end markets [4] - The company recorded a $1.2 billion impairment charge due to weaker demand in specific regions and segments, impacting reported results and the quarter's tax situation [5] - Management has adopted a more conservative capital allocation approach, reducing its 2026 CapEx guidance to $1.2 billion while emphasizing shareholder returns and maintaining an investment-grade balance sheet [5] Market Outlook - BofA analyst Matthew DeYoe lowered LyondellBasell's price target to $46 from $52, maintaining a Neutral rating, reflecting a cautious outlook on the chemicals sector rather than specific issues at LYB [2] - The broader chemicals sector is expected to face another year of oversupply in commodity chemicals, with specialty chemicals experiencing uneven demand [3] - Potential positive catalysts include improving PMI indicators, interest rate cuts, and capacity rationalization in China, although it is considered too early to rely on these signals [3] Strategic Focus - LyondellBasell is focused on controlling its operations, including portfolio optimization through the pending sale of European assets and delaying certain capital projects to preserve cash [4]