LyondellBasell beats Q2 expectations with strong earnings, maintains Buy rating and $80 target.

LyondellBasell reported Q2 results that significantly exceeded expectations, driven mainly by strong performance in its O&P Americas division with adjusted EBITDA reaching $1.27 billion. However, these high margins are expected to normalize as Middle East supply stabilizes. The company’s cost-cutting measures, asset sales, and improved balance sheet, with net debt to EBITDA ratio reduced to 2.6x, support sustained profitability even at normalized margins. The analyst maintains a Buy rating with an $80 base case target, expecting normalized earnings per share between $6.50 and $7.00, and views 2027 as a key year to evaluate structural improvements.