LyondellBasell Industries N.V.: A Bullish Case Theory on Plastics and Chemicals Producer

LyondellBasell Industries N.V. (LYB) is a plastics and chemicals producer with a structural cost advantage due to its advantaged ethane-based feedstocks. Recent performance has been impacted by trough-level polyethylene pricing, but signs of a cyclical inflection are emerging. The company has a strong balance sheet, disciplined growth strategy, and a 10-year median ROIC above 20%. Shares have fallen 40% from 2024 highs, pricing in a prolonged downturn, but a return to mid-cycle margins and selective growth could expand FCF margins to 12% and lift fair value toward $274.