LyondellBasell Could Hit $87 by Year-End Given These Catalysts

Core Viewpoint - LyondellBasell (LYB) is projected to reach a price target of $87 by year-end, driven by tightening polyethylene inventories, recovering oxyfuels margins, and moderating feedstock costs [2][6]. Group 1: Stock Performance - LyondellBasell's stock has surged 43.45% over the past month and 88.01% year-to-date, with shares recently trading near $83.79, compared to a 52-week low of $41.58 [2][5]. - The stock gained 15.68% over the past week and 44.77% over the past month, indicating a strong recovery in the basic materials sector [4]. Group 2: Analyst Insights - Wells Fargo analyst Michael Sison raised the price target for LyondellBasell to $87 from $70, citing higher polyethylene prices and oxyfuels margins as key drivers for estimate increases through 2027 [2][6]. - The new price target represents an 8% upside from current levels and is 35% above the Street consensus price target of $64.18 [6]. Group 3: Market Conditions - North American polyethylene inventories fell to 40 days in November 2025 from 44 days in Q2 2025, with a reduction of approximately 500 million pounds in Q4 2025, supporting price increases [7]. - Natural gas feedstock costs have moderated to $3.62/MMBtu in February 2026 from a January spike of $7.72/MMBtu, improving margin visibility for LyondellBasell [7]. Group 4: Key Drivers for Future Performance - The recovery of polyethylene prices is expected to be supported by tight year-end inventories and reduced supply due to Winter Storm Fern [11]. - Oxyfuels profitability is anticipated to exhibit seasonal margin improvements, with summer-season tailwinds expected [11]. - LyondellBasell exceeded its cash improvement target, delivering $800 million in 2025 against a $600 million target, and raised its cumulative target to $1.3 billion by year-end 2026 [11].