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Why Some Analysts Have Raised LyondellBasell’s Target Price

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Analyst consensus on LyondellBasell

In the past eight months, the number of analysts tracking LyondellBasell has remained constant. Currently, 24 analysts have been actively following this stock. Among them, 29% of the analysts have recommended the stock as a “buy,” 63% of the analysts have recommended the stock as a “hold,” while 8% of the analysts rated it a “sell.”

Analysts’ consensus target price for LyondellBasell is $109.70. However, the stock is already trading well above the target price. Since October, LYB’s target price has gained upward traction and has moved up from $99.75 to the current target price.

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Majority of analysts are suggesting a “hold”

LyondellBasell along with Suez, a French Company, bought a 50% stake in Quality Circular Polymers, a plastic recycling company from the Netherlands. Also, LYB’s decision to build the world’s largest propylene oxide and tertiary butyl alcohol plant in the Houston area could be future growth drivers for LYB. Also, LYB’s new share repurchase program will likely help to add more value to the remaining shareholders. LYB’s growth strategies have likely played a role in analysts’ “hold” rating.

Individual analysts’ target prices

  • Morgan Stanley (MS) has recommended a target price of $130 for LYB stock, implying a return potential of 9.3% over its closing price of $118.94 on January 24, 2018.
  • Jefferies has recommended a target price of $118 for LYB. However, the stock is already marginally up by 0.80% over the closing price as of January 24, 2018.
  • Citigroup rated LyondellBasell as a “buy” and recommended a target price of $120.00, 0.90% over the closing price as of January 24, 2018.

Investors can indirectly hold LyondellBasell by investing in the Materials Select Sector SPDR Fund (XLB), which has invested 5.5% of its portfolio in LyondellBasell. The fund also provides exposure to Praxair (PX) and Air Products and Chemicals (APD), which have weights of 6.5% and 5.3%, respectively, as of January 24, 2018.

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