Value
7.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.9 |
| EV/EBITDA | 3.8 |
| Fwd P/E | 9.6 |
| PEG | 5.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 7.5x
- ▸PEG: 1.53
- ▸Attractively valued
LYB · Why this verdict
Why LyondellBasell Industries (LYB) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score3.9/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A forward multiple of 8.4x and roughly 14% upside to the analyst target create an apparently favorable risk/reward geometry, but below-threshold business quality, a 6% revenue decline, and an erratic earnings record make the setup uninvestable until the cyclical trough is confirmed and fundamental quality recovers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality has fallen well below the minimum acceptable threshold, with operating margins compressed, no competitive moat identified, and quality concerns flagged across multiple financial dimensions — the fundamental profile does not meet the criteria for a durable position. Quality | Business quality improves above the minimum threshold — a score above 4.0 on a 10-point scale — within 12 months, driven by margin recovery and improved return metrics. | →Stable |
| CounterAt a forward P/E of 8.4x, the market may already be pricing in quality weakness; a cyclical recovery in specialty chemicals could rapidly expand margins and push the quality score back above acceptable levels, rewarding early buyers. | ||
Revenue is shrinking at roughly 6% year-over-year, which combined with suppressed margins means the earnings base is eroding in both volume and unit economics simultaneously. Growth | Revenue growth turns positive on a year-over-year basis for two consecutive reported quarters, indicating the cyclical trough is behind. | →Stable |
| CounterSpecialty chemicals revenue can be highly cyclical; a trough in volumes often coincides with the most attractive entry points if the company's balance sheet allows it to survive the down-cycle intact. | ||
Two beats and two misses over the last four quarters, with an average earnings surprise of approximately negative 31%, reflect an unpredictable earnings cadence that makes it difficult to underwrite a forward estimate with confidence. Earnings | The company delivers earnings at or above consensus for 3 of the next 4 quarters, restoring a baseline predictability to the earnings profile. | →Stable |
| CounterThe most recent quarter produced a significant beat of 76%, suggesting the miss pattern may be reversing; in commodity-linked businesses, beats and misses often cluster at cycle turns, and a sustained beat sequence here would confirm the inflection. | ||
The risk/reward geometry is roughly 2-to-1 in your favor with about 14% upside to the analyst-derived target — a favorable setup that is nonetheless undercut by the quality and momentum failures that currently block a constructive verdict. Price targets | Momentum recovers above the minimum constructive level — a score above 4.5 on a 10-point scale — while business quality improves above the minimum floor within 12 months, allowing the favorable risk/reward to become actionable. | →Stable |
| CounterThe high implied volatility of 90% signals that the market expects large price swings; if further earnings misses or a dividend cut erode the analyst target, the 14% upside headroom could compress quickly and the 2-to-1 ratio would no longer hold. | ||
Business quality has fallen well below the minimum acceptable threshold, with operating margins compressed, no competitive moat identified, and quality concerns flagged across multiple financial dimensions — the fundamental profile does not meet the criteria for a durable position.
→StableQuality
- Expectation
- Business quality improves above the minimum threshold — a score above 4.0 on a 10-point scale — within 12 months, driven by margin recovery and improved return metrics.
CounterAt a forward P/E of 8.4x, the market may already be pricing in quality weakness; a cyclical recovery in specialty chemicals could rapidly expand margins and push the quality score back above acceptable levels, rewarding early buyers.
Revenue is shrinking at roughly 6% year-over-year, which combined with suppressed margins means the earnings base is eroding in both volume and unit economics simultaneously.
→StableGrowth
- Expectation
- Revenue growth turns positive on a year-over-year basis for two consecutive reported quarters, indicating the cyclical trough is behind.
CounterSpecialty chemicals revenue can be highly cyclical; a trough in volumes often coincides with the most attractive entry points if the company's balance sheet allows it to survive the down-cycle intact.
Two beats and two misses over the last four quarters, with an average earnings surprise of approximately negative 31%, reflect an unpredictable earnings cadence that makes it difficult to underwrite a forward estimate with confidence.
→StableEarnings
- Expectation
- The company delivers earnings at or above consensus for 3 of the next 4 quarters, restoring a baseline predictability to the earnings profile.
CounterThe most recent quarter produced a significant beat of 76%, suggesting the miss pattern may be reversing; in commodity-linked businesses, beats and misses often cluster at cycle turns, and a sustained beat sequence here would confirm the inflection.
The risk/reward geometry is roughly 2-to-1 in your favor with about 14% upside to the analyst-derived target — a favorable setup that is nonetheless undercut by the quality and momentum failures that currently block a constructive verdict.
→StablePrice targets
- Expectation
- Momentum recovers above the minimum constructive level — a score above 4.5 on a 10-point scale — while business quality improves above the minimum floor within 12 months, allowing the favorable risk/reward to become actionable.
CounterThe high implied volatility of 90% signals that the market expects large price swings; if further earnings misses or a dividend cut erode the analyst target, the 14% upside headroom could compress quickly and the 2-to-1 ratio would no longer hold.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.2 |
| Gross margin | 0.0 |
| Op margin | 1.4 |
| Net margin | 0.0 |
| Current ratio | 5.6 |
| Moat | 2.5 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
0.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.9 |
| EPS growth | 0.0 |
- ▸Declining revenue: -6%
Momentum
1.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 16, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+4.1%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 5.0 |
| Price target | 9.4 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Analyst upside: 46%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $741,573 (0.004% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.9 |
| quality rank | 1.7 |
| growth rank | 0.3 |
Technical
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.5 |
| 52w position | 3.3 |
| gap | 6.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 8.9 |
| volatility | 1.4 |
| put call | 0.0 |
| implied vol | 5.4 |
| beta | 10.0 |
| debt equity | 4.2 |
- ▸Elevated put/call: 3.12
Catalyst
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 8.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 734.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:3.5>=1.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.2<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.51
Upside
+31.3%
Downside
8.9%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.5 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:1.2<4.5.
The strongest dimensions are Value at 7.5, Technical at 7.2, and Sentiment at 7.0; the weakest are Growth at 0.5, Momentum at 1.2, and Quality at 1.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.51 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Business quality has fallen well below the minimum acceptable threshold, with operating margins compressed, no competitive moat identified, and quality concerns flagged across multiple financial dimensions — the fundamental profile does not meet the criteria for a durable position.
Trip ifQuality score rises above 4.0 for 2 consecutive quarters.
- P2Revenue is shrinking at roughly 6% year-over-year, which combined with suppressed margins means the earnings base is eroding in both volume and unit economics simultaneously.
Trip ifRevenue growth turns positive (above 0%) year-over-year for 2 consecutive reported quarters.
- P3Two beats and two misses over the last four quarters, with an average earnings surprise of approximately negative 31%, reflect an unpredictable earnings cadence that makes it difficult to underwrite a forward estimate with confidence.
Trip ifEPS surprise stays above 0% for 3 of the next 4 reported quarters.
- P4The risk/reward geometry is roughly 2-to-1 in your favor with about 14% upside to the analyst-derived target — a favorable setup that is nonetheless undercut by the quality and momentum failures that currently block a constructive verdict.
Trip ifUpside to the analyst target of $71.89 falls below 3% (price rises above $69.80) before momentum or quality recover.