Rating Change #1
LyondellBasell Industries NV (LYB - Get Report) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 316.74% to $921.00 million when compared to the same quarter last year. In addition, LYONDELLBASELL INDUSTRIES NV has also vastly surpassed the industry average cash flow growth rate of -35.11%.
- LYB, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, LYONDELLBASELL INDUSTRIES NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
LyondellBasell Industries N.V. manufacturers and sells chemicals and polymers, refines crude oil, produces gasoline blending components, and develops and licenses technologies for the production of polymers. The company has a P/E ratio of 12.2, equal to the average chemicals industry P/E ratio and below the S&P 500 P/E ratio of 17.7. LyondellBasell has a market cap of $26.27 billion and is part of the basic materials sector and chemicals industry. Shares are up 28.6% year to date as of the close of trading on Tuesday.You can view the full LyondellBasell Ratings Report or get investment ideas from our investment research center. -- Reported by Kevin Baker in Jupiter, Fla.
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