LyondellBasell Hits New 52-Week High: What's Driving It?

Shares of LyondellBasell Industries N.V. (NYSE:LYB) scaled a fresh 52-week high of $111.62 on Dec 29, before eventually closing the day at $110.32.

The company has a market cap of roughly $43.5 billion. Average volume of shares traded in the last three months is around 2,095.8K. It has an expected long-term EPS growth of 9%.

Shares of LyondellBasell have moved up 10.6% in the past three months, outperforming the industry’s 3.8% growth.

Driving Factors

During third-quarter earnings call, LyondellBasell noted that Hurricane Harvey led to reduced inventories across the petrochemical industry. This has resulted in further delays in the startup of new U.S. ethylene and derivative capacity. The company expects global markets to remain tight to balanced as the industry works to rebuild inventories during the fourth quarter.

The company is benefiting from the favorable North American natural gas environment. It is executing its expansion projects to leverage the U.S. natural gas liquids advantage. The company’s expansion initiatives are likely to boost the capacity and add to its earnings.

LyondellBasell is constructing a high-density polyethylene (HDPE) plant on the U.S. Gulf Coast that will employ its proprietary Hyperzone PE technology. The facility is expected to have an annual capacity of 1.1 billion pounds.

Furthermore, the company has started production at its polypropylene (PP) compounding plant in Dalian, China. The 20 kiloton per year plant is LyondellBasell’s third facility in China. It is strategically located to cater the country’s growing automotive market.

In November, LyondellBasell entered into a definitive agreement to buy 50% interest in Quality Circular Polymers (“QCP”) — a high standard plastics recycling company located in Sittard-Geleen, Netherlands. Per the agreement, LyondellBasell will be a 50/50 partner in QCP along with SUEZ — a French company specializing in waste and water management.

The deal combines LyondellBasell's technical capabilities and European market presence with SUEZ's ability to collect and recover waste into new materials. The new venture is likely to provide a strategic platform for sustainable growth.

LyondellBasell Industries NV Price and Consensus

LyondellBasell Industries NV Price and Consensus | LyondellBasell Industries NV Quote

Zacks Rank & Stocks to Consider

LyondellBasell currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Huntsman Corporation (NYSE:HUN) , Daqo New Energy Corp. (NYSE:DQ) and Kronos Worldwide Inc. (NYSE:KRO) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntsman has an expected long-term earnings growth rate of 8%. Its shares have soared 72.8% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied a whopping 199.4% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 113.2% year to date.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

Download it free >>