UPDATE: Bank of America Boost PO to $51 on LyondellBasell
Bank of America reiterates its Buy rating on LyondellBasell (NYSE: LYB) and raises its price objective to $51 from $42.50 as investors focus more on the increased earning potential in the company's future than the miss in EPS for Q4.
Bank of America notes, "LYB shares traded up fractionally in a down market Friday despite a sizeable 4Q earnings miss of $0.41 vs. the FC mean of $0.77. Investors remain rightly focused on future results, when Lyondell stands to benefit from an ongoing, sharp decline in the cost ethane feedstock, better demand, and recovering refining spreads. Key takeaways: (1) EBITDA of $672mn fell short of our forecast; (2) majority of variance was in Refining & Oxyfuels, where EBITDA declined a whopping $493mn vs. 3Q; (3) the benchmark Maya 2-1-1 refining spread sank to ~$12/bbl in 4Q but has since rebounded to $16+/bbl in January and $20+ currently & (4) ethane feed costs at the Mont Belvieu, TX hub are now down 44% YTD in US."
LYB closed at $44.75 a share on Friday.
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