There is no hope for profit recovery in the next two years! BMO downgrades chemical giant LYB.US (LYB.US) to “outperform the market” and warns that stock prices may continue to be under pressure

The Zhitong Finance App learned that BMO Capital Markets downgraded its stock rating of Leander Basel (LYB.US) from “on par with the market” to “outperforming the market”, and warned that increasing commodity and financial pressure may continue to drag down the chemical group until 2026. BMO lowered its target price for the stock from $48 to $36 and said the valuation reflects ongoing challenges associated with weak demand for commodities, pressure on margins, and a lack of a catalyst for improvement in the short term.

According to reports, Leander Basel was founded in 2000 and is the world's largest producer of polypropylene and polyolefin process leader. Its products cover propylene oxide derivatives, biofuels and polypropylene compounds, which are widely used in automotive, electronics, packaging and medical fields.

BMO analyst John McNulty pointed out that the fundamentals of key commodity markets have deteriorated beyond previous expectations, limiting the possibility that the company will achieve a substantial profit recovery in 2026 or 2027. The analyst added that despite management's efforts to improve its balance sheet, these conditions may continue to put pressure on Leander Basel's stock price.

Management recently adopted a more conservative financial stance, which BMO believes supports potential dividend cuts aimed at boosting free cash flow and improving credit metrics. However, analysts also pointed out that these defensive measures may be difficult to offset the broader structural resistance faced by the business.