LyondellBasell Downgraded to Underperform After 80% Rally, Target $68
Bank of America cut LyondellBasell rating to Underperform after its shares jumped roughly 80% year to date on conflict-related tailwinds deemed unsustainable. The analyst raised its price target to $68 from $55 and boosted its 2026–27 earnings forecasts on a higher energy price backdrop.
1. Rating Change and Rationale
Bank of America lowered LyondellBasell’s rating from Neutral to Underperform, citing concerns that year-to-date share gains of roughly 80% were driven by temporary conflict-related tailwinds and may not be sustainable.
2. Price Target and Earnings Revision
The analyst raised LyondellBasell’s price target to $68 from $55 and boosted its 2026 and 2027 earnings forecasts, reflecting a higher energy price backdrop that supports near-term profitability.
3. Rally Drivers and Future Risks
Shares have surged on geopolitical tensions tied to the conflict in Iran, but analysts warn that resolution or normalization could trigger oversupply, downward pressure on petrochemical prices and potential earnings headwinds.
4. Analyst Outlook Through 2027-28
Analysts expect market fundamentals—oversupply and price normalization—to reassert by 2027 and 2028, which could weigh on LyondellBasell’s longer-term earnings growth despite current elevated profit levels.