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A week ago, LyondellBasell Industries N.V. (NYSE:LYB) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 3.5% to hit US$28b. LyondellBasell Industries also reported a statutory profit of US$4.24, which was an impressive 28% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LyondellBasell Industries after the latest results.
See our latest analysis for LyondellBasell Industries
Taking into account the latest results, the current consensus from LyondellBasell Industries' eleven analysts is for revenues of US$32.7b in 2021, which would reflect a meaningful 18% increase on its sales over the past 12 months. Per-share earnings are expected to surge 94% to US$8.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$31.5b and earnings per share (EPS) of US$8.08 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of US$96.37, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic LyondellBasell Industries analyst has a price target of US$119 per share, while the most pessimistic values it at US$80.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await LyondellBasell Industries shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that LyondellBasell Industries' rate of growth is expected to accelerate meaningfully, with the forecast 18% revenue growth noticeably faster than its historical growth of 1.0%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that LyondellBasell Industries is expected to grow much faster than its industry.