BMO Raises LyondellBasell Target to $38, Warns Dividend Cut May Fall Short
BMO Capital raised LyondellBasell’s price target to $38 from $36 while maintaining an Underperform rating, citing weak demand. The company warned the dividend cut may remain insufficient to strengthen the balance sheet, highlighting revised 2030 goals of 32% Scope 1–2 emissions reduction and 800,000 metric tons of recycled polymers annually.
1. BMO Capital Revises Price Target and Rating
On February 23, BMO Capital lifted its price target on LyondellBasell from $36 to $38 while maintaining an Underperform rating. The analyst emphasized persistent weak demand in chemical markets as the primary driver for caution, noting that current business conditions justify a conservative valuation despite the modest upward adjustment in outlook.
2. Dividend Cut Raises Financial Concerns
Management implemented a long-expected dividend cut to bolster the balance sheet, but analysts caution the adjusted payout may still overstretch cash flow if market headwinds persist. The move underscores potential strains on liquidity and highlights the need for further capital preservation measures amid subdued demand.
3. Updated 2030 Climate and Circularity Goals
LyondellBasell revised its 2030 agenda to target a 32% reduction in Scope 1 and 2 emissions from 2020 levels and produce 800,000 metric tons of recycled and renewable-based polymers annually. The company has already commissioned its MoReTec-1 recycling plant in Germany, upgraded key facilities to lower emissions, and increased renewable energy usage to support these commitments.