LyondellBasell’s 1Q18 earnings

LyondellBasell is set to announce its 1Q18 earnings on April 27 before the market opens. It will hold a conference call on the same day at 11:00 AM EST. In this series, we’ll look at LyondellBasell’s stock performance since its 4Q17 earnings. We’ll also look at analysts’ revenue and EPS (or earnings per share) estimates and the latest recommendations for the stock. Finally, we’ll compare LYB’s latest valuation against its peers and look at LYB’s short interest.

How LyondellBasell Stock Has Performed since 4Q17 Earnings

Since LYB’s 4Q17 earnings on February 2, 2018, until April 20, 2018, LYB has declined by 4.0%. LYB underperformed peers Eastman Chemical (EMN) and Westlake Chemical (WLK), which have risen 8.1% and 3.3%, respectively. Olin (OLN) has fallen 18.1%. The decline in LYB’s stock was primarily due to the volatility prevailing in the stock market due to the fear of trade wars related to tariffs between the US and China. Speculation that the Fed could raise rates more in fiscal 2018 and the geopolitical situation in the Middle East also fueled volatility. LYB has a beta of 1.3, which indicates that it’s a high beta stock and negative market sentiments have resulted in the stock falling more than the broader market itself.

On the other hand, the following positive business developments could drive the stock up:

  • LYB increased its quarterly cash dividend by 11%.
  • LYB and SUEZ began joint operation of acquired Quality Circular Polymers (or QCP).
  • LYB received US antitrust clearance for its A.Schulman acquisition.

Moving averages and RSI

LYB’s decline in stock price has resulted in the stock trading 1.7% above the 100-day moving average price of $109.52, indicating weakness in the stock. LYB’s 14-day relative strength index of 57 shows that the stock is neither overbought nor oversold. An RSI of 30 or below suggests that the stock is oversold, while an RSI of 70 and above indicates that the stock is overbought.

Investors can invest indirectly in the PowerShares S&P 500 Equal Weight Materials Portfolio (RTM), which has invested 3.8% of its portfolio in LyondellBasell as of April 20.

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