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LyondellBasell (LYB) to Post Q4 Earnings: What's in Store?

LyondellBasell Industries N.V. LYB is set to release fourth-quarter 2020 results on Jan 29, before the opening bell. The benefits of higher demand for its products owing to recovery in global economies are likely to get reflected in its fourth-quarter performance. The company is likely to have gained from higher polyethylene demand in the quarter under review.

LyondellBasell beat the Zacks Consensus Estimate for earnings in three of the last four quarters, while missing the same once. It has a trailing four-quarter earnings surprise of roughly 6.1%, on average. The company posted an earnings surprise of around 15.5% in the last reported quarter.

Shares of LyondellBasell have gained 6% in the past year against 23.2% rise of the industry.

Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for LyondellBasell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.

Earnings ESP: Earnings ESP for LyondellBasell is +3.40%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.35. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LyondellBasell currently carries a Zacks Rank #2.

What do the Estimates Say?

The Zacks Consensus Estimate for fourth-quarter consolidated sales for LyondellBasel is pegged at $7,075 million, which suggests a decline of around 13.5% year over year.

The Zacks Consensus Estimate for sales in LyondellBasell’s Olefins & Polyolefins — Americas unit is currently pegged at $1,988 million, which suggests a decline of 4.1% year over year.

The Zacks Consensus Estimate for sales in the Olefins & Polyolefins — Europe, Asia, International segment is currently pegged at $1,911 million, which suggests a fall of 11.3% year over year.

The consensus mark for sales in the Intermediates and Derivatives segment is currently pegged at $1,582 million, which calls for a decline of 13.6% year over year.

The Zacks Consensus Estimate for sales in the Refining segment is currently at $1,181 million, which indicates a fall of 42.5% year over year.

The consensus mark for sales in the Technology segment is currently pegged at $165 million, which suggests a fall of 18.7% year over year.

Factors at Play in Q4

The company, in its third-quarter call, noted that it expects the petrochemical industry to gain from recovery in global economies. Improved demand for polyethylene in North America drove volumes and margins in the third quarter, and is expected to have continued to boost North American integrated polyethylene margins in the fourth quarter. Global polyethylene demand has also grown despite the pandemic.

LyondellBasell is seeing a recovery in the market environment on the back of reopening of economies globally. It is witnessing improved volumes from automotive and other durable goods markets as well as sustained strong demand from packaging and health care markets.

A recovery in automotive manufacturing is driving volumes in the Advanced Polymer Solutions business segment. Higher demand from automotive manufacturing and other durable goods markets is likely to have boosted performance in this segment in the quarter to be reported.

LyondellBasell Industries N.V. Price and EPS Surprise

 

LyondellBasell Industries N.V. price-eps-surprise | LyondellBasell Industries N.V. Quote

 

Other Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:

Axalta Coating Systems Ltd. AXTA, scheduled to release earnings on Feb 3, has an Earnings ESP of +8.05% and carries a Zacks Rank #3.You can see the complete list of today’s Zacks #1 Rank stocks here.

Eastman Chemical Company EMN, scheduled to release earnings on Jan 28, has an Earnings ESP of +16.17% and carries a Zacks Rank #2.

Ecolab Inc. ECL, scheduled to release earnings on Feb 16, has an Earnings ESP of +0.08% and carries a Zacks Rank #3.

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Ecolab Inc. (ECL): Free Stock Analysis Report
 
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