LyondellBasell Industries N.V. (LYB): A Bull Case Theory 

We came across a bullish thesis on LyondellBasell Industries N.V. on Value Degen’s Substack’s Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on LYB. LyondellBasell Industries N.V.’s share was trading at $46.76 as of October 15th. LYB’s trailing and forward P/E were 104.96 and 12.99 respectively according to Yahoo Finance.

LyondellBasell Industries (LYB) faces a nuanced risk/reward scenario driven by recent developments in its debt covenants. Historically a reliable dividend aristocrat, LYB may now be forced to suspend its dividend due to a covenant requiring suspension if Net Debt/EBITDA exceeds 4.25x. Management is proactively addressing the issue by cutting capital expenditures, but further softness in the chemicals market could pressure results.

Based on current guidance, Q3 2025 EBITDA is expected to reach approximately $800 million and Q4 2025 around $1 billion. This trajectory would increase Net Debt/EBITDA from the current 2.82x to roughly 3.7x by year-end, keeping the dividend intact. However, any significant downside in chemical earnings could breach the covenant, risking an aggressive sell-off in the stock. Given this uncertainty, LYB may be more suited for watchlist monitoring rather than immediate purchase. Investors seeking chemical sector exposure with lower dividend risk might consider alternatives such as OEC, while those focused on stable income may find DIN more attractive despite pressures in the restaurant sector.

Should LYB’s shares decline to around $30 or below amid market weakness, it could present a compelling long-term opportunity, offering potential threefold returns if the chemicals cycle recovers. Overall, LYB’s situation highlights a delicate balance between operational performance, covenant constraints, and dividend policy, creating both caution and potential upside for investors willing to navigate cyclical risk. The market’s near-term reaction will likely hinge on upcoming EBITDA results and the company’s ability to manage leverage proactively, making close monitoring essential.

Previously we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 in November 2024, which highlighted EMN’s positioning amid export control changes and regulatory compliance advantages. The company’s stock price has depreciated approximately by 39.97% since our coverage. This is because the thesis didn’t fully play out. The thesis still stands as EMN maintains long-term market potential. Unemployed Value Degen shares a similar focus but emphasizes LYB’s debt covenant risks and potential dividend suspension.

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Disclosure: None.