Investment Thesis
LyondellBasell exhibits severe operational deterioration with negative operating cash flow of -$269M, collapsed profitability (net income down 154% YoY), and flat revenue growth. The company carries substantial debt ($11.2B) with dangerously weak interest coverage (1.9x) while destroying shareholder value with ROE of 1.2% and ROA of 0.4%.
Strengths
- Adequate current ratio (1.54x) provides near-term liquidity buffer
- Cash position of $2.6B provides some operational flexibility
- Gross margins of 17% indicate underlying product pricing power
Risks
- Negative operating cash flow of -$269M indicates core business is not generating cash
- Negative free cash flow of -$538M with no evident path to recovery
- High leverage (1.12x debt/equity) with insufficient interest coverage (1.9x) creates vulnerability
- Profitability collapsed 154% YoY while revenue grew 0% - operational crisis
- Abysmal returns on equity and assets (1.2% and 0.4%) destroying shareholder capital
Key Metrics to Watch
- Operating cash flow trend - must return to positive territory
- Interest coverage ratio - current 1.9x leaves no margin for error
- Debt/equity ratio - must trend downward to reduce leverage risk
- Quarterly revenue and margin trends - need to stabilize decline
Financial Metrics
Revenue
7.2B
Net Income
125.0M
EPS (Diluted)
$0.38
Free Cash Flow
-538.0M
Total Assets
34.0B
Cash
2.6B
Profitability Ratios
Gross Margin
17.0%
Operating Margin
3.3%
Net Margin
1.7%
ROE
1.2%
ROA
0.4%
FCF Margin
-7.5%
Balance Sheet & Liquidity
Current Ratio
1.54x
Quick Ratio
1.03x
Debt/Equity
1.12x
Debt/Assets
0.0%
Interest Coverage
1.88x
Long-term Debt
11.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T19:42:02.669117 |
Data as of: 2026-03-31 |
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