UPDATE: JPMorgan Raises LyondellBassell PT to $71, Forecasting Increased Earnings

In a Thursday report, JP Morgan maintained its Overweight rating on LyondellBasell Industries LYB and raised its price target from $68 to $71. JP Morgan wrote, "We raised our 2013 and 2014 earnings estimates for LyondellBasell to reflect lower raw material (ethane) costs in the North American Olefins segment. We believe that ethane is likely to be so oversupplied over the next several years that LyondellBasell's ethane costs are likely to remain level or move lower despite possible inflation in natural gas prices. We raised our 2013 EPS estimate from $5.60 to $5.75 and our 2014 forecast from $6.25 to $6.50. Our 2015 projection remains $7.00 as our increase in ethane margins was offset by a moderation in projected naphtha margins. We believe that a combination of a high and sustainable level of free cash flow generation (almost 9%) and an unleveraged balance sheet with a low valuation (5.3x 2014 EBITDA) should make for continued outperformance for LyondellBasell shares. We raised our year ahead target from $68 to $71 to reflect our EPS increased and a 6.0x target multiple of Enterprise Value to EBITDA." LyondellBasell closed Wednesday at $62.72