Breaking Down LyondellBasell Industries N.V. (LYB) Financial Health: Key Insights for Investors

You're an investor in a deeply cyclical business like chemicals, so you know the headline numbers can be misleading-and LyondellBasell Industries N.V. (LYB) in 2025 is the perfect example. You need to look past the noise: while the company reported a Q3 2025 GAAP Net Loss of $890 million due to a significant $1.2 billion non-cash asset write-down, the operational performance tells a different story entirely. The business is defintely focused on cash, generating $983 million from operating activities in the quarter and remaining on track to deliver its $600 million incremental cash flow target for the full 2025 fiscal year. That's a massive commitment to liquidity. Plus, the Olefins & Polyolefins Americas segment saw a strong 35% quarter-on-quarter EBITDA improvement, showing that regional efficiency is paying off even as full-year revenue is projected to land around $30.16 billion. We need to assess if this strategic focus on cash and cost-advantaged assets is enough to justify the current analyst consensus 'Hold' rating and the average price target of $56.19.

Revenue Analysis

You're looking at LyondellBasell Industries N.V. (LYB) in a cyclical downturn, and the top-line numbers reflect that. The direct takeaway is that while quarterly revenue is contracting year-over-year, the company's full-year outlook and core petrochemical segments remain resilient, especially in the Americas.

For the third quarter of 2025, LyondellBasell reported sales and other operating revenues of $7.73 billion, which actually surpassed analyst estimates. But to be fair, that figure represented a year-over-year (YoY) revenue decline of around -10.20% for the quarter, largely driven by lower average sales prices and reduced demand across several segments. This is a classic chemical industry dynamic: prices fall faster than volumes in a weak market.

Here's the quick math on the near-term trend: Q1 2025 revenue was $7.677 billion, and Q2 2025 was $7.658 billion. The slight sequential increase to $7.73 billion in Q3 shows some stabilization, but the full-year 2025 revenue is projected by analysts to land around $30.16 billion, indicating a tough year compared to the $40.302 billion reported in 2024.

Shifting Revenue Streams: The Exit from Refining

The biggest structural change you need to track is the company's strategic portfolio shift. LyondellBasell is actively reshaping its asset base to focus on its core, higher-margin petrochemicals business. This means the refining business-previously its own segment-is now reported as a discontinued operation, with its operations ceasing in February 2025. This move cuts a historically volatile, low-margin revenue stream, which is a smart, decisive action for long-term stability.

What this estimate hides is the underlying strength in their core products, which are the real drivers of long-term value. The company is a global leader, and its revenue is heavily concentrated in its core products. You can read more about the long-term strategic direction here: Mission Statement, Vision, & Core Values of LyondellBasell Industries N.V. (LYB).

• Refined Products: This segment, which includes the now-discontinued refining business, was a significant part of the revenue base, contributing approximately 21.7% of the total revenue in a recent trailing twelve-month period. Its removal will dramatically change the revenue mix going forward.
• Polyethylene (PE): This is a core polymer product, contributing about 20.4% of revenue. The company is seeing early signs of demand recovery in North America and Europe for PE, which is a positive sign for this major stream.
• Polypropylene (PP): Another core polymer, this accounts for roughly 16.9% of revenue. LyondellBasell is the world's largest producer of polypropylene.

Segment Contribution and Regional Focus

LyondellBasell's revenue is geographically concentrated, with the United States generating the largest share at approximately 48.3% of the total revenue. This heavy reliance on North American operations, which benefit from cost-advantaged natural gas liquids (NGLs) feedstock, is a key competitive advantage, defintely in a high-cost environment.

The operational improvements in the Olefins and Polyolefins Americas segment are a clear bright spot, showing improved profitability in Q3 2025 following successful turnarounds. The table below shows the approximate product contribution, which maps closely to their core business segments like Olefins & Polyolefins, and Intermediates & Derivatives.

The path forward is clear: the company is betting on its core petrochemicals business and leveraging its North American cost advantage. That's the action you should focus on.

Profitability Metrics

You're looking at LyondellBasell Industries N.V. (LYB) in a tough cyclical environment, so the headline numbers are going to look messy. The direct takeaway is that while GAAP profitability is deeply negative due to a major non-cash write-down, the company's underlying operational performance, when adjusted for these one-time items, shows a modest but pressured profit margin.

Let's break down the core profitability ratios-Gross Profit, Operating Profit, and Net Profit margins-using the most recent 2025 data. The key challenge for LyondellBasell is that its Trailing Twelve Months (TTM) margins through September 30, 2025, are dramatically below the industry average for the Chemicals sector.

• Gross Margin: TTM is only 8.16%, far below the industry average of 39.12%.
• Operating Margin: TTM stands at 3.3%, compared to the industry's 12.18%.
• Net Margin: TTM is negative, at -3.2%, versus the industry's 6.58%.

The TTM net loss of $-1.208 billion ending September 30, 2025, is a sharp 156.24% decline year-over-year, reflecting the challenging market and asset write-downs.

Operational Efficiency and Cost Management

The gross margin trend is the first place you see the pressure. The gross profit margin for LyondellBasell has been trending down over the past few years, indicating rising costs of goods sold (COGS) relative to revenue, a classic sign of a downturn in the chemical cycle. For the third quarter of 2025 alone, the Gross Profit was $906 million on $7.727 billion in revenue, which gives a Gross Margin of about 11.72%.

To be fair, the company is fighting back. Management is executing a 'Cash Improvement Plan' that is on track to deliver a $600 million target in 2025 by focusing on fixed cost reduction and better working capital management. This is a defintely necessary action to stabilize the operating margin, which was a deeply negative -9.46% in Q3 2025 on a GAAP basis due to a massive $1.2 billion in non-cash asset write-downs.

The GAAP vs. Adjusted Profitability Picture

When you strip out those identified items-like the asset write-downs and restructuring costs-the picture shifts from a loss to a modest profit, which is what analysts often focus on to gauge core business health. Here's the quick math on the most recent quarter, Q3 2025:

The adjusted Net Profit Margin of 4.27% in Q3 2025 is still below the industry TTM average of 6.58%, but it shows the core business is profitable. This is a crucial distinction for investors, as the GAAP loss is mostly an accounting event. You need to understand the drivers behind this performance, which is why you should be Exploring LyondellBasell Industries N.V. (LYB) Investor Profile: Who's Buying and Why?

Next step: Dig into the segment reporting to see which business units are driving the adjusted profit, and which are dragging down the overall GAAP numbers.

Debt vs. Equity Structure

LyondellBasell Industries N.V. (LYB) is operating with a balanced, though slightly elevated, debt-to-equity (D/E) ratio compared to its specialty chemicals peers, reflecting its capital-intensive nature and recent market pressures. As of September 2025, the company's D/E ratio stood at approximately 1.25. This is a critical metric, telling us that for every dollar of shareholder equity, the company has $1.25 in total debt.

Honestly, a ratio of 1.25 isn't a red flag by itself, but it's defintely something to watch. For context, the average D/E ratio for the broader Chemicals industry is closer to 0.85, and for Specialty Chemicals, it's even lower at around 0.65. This suggests LyondellBasell Industries N.V. is more highly leveraged than many of its direct competitors, like Dow Inc. at 0.76. You can see this leverage in the breakdown:

• Total Stockholders Equity (Sep 2025): $10,599 million
• Total Debt (Short- and Long-Term, Sep 2025): Approximately $13,216 million

Here's the quick math: the company is using debt financing to fund a significant portion of its assets, which can amplify returns in good times, but also magnify losses when the petrochemical cycle turns down.

The company's financing strategy leans on a substantial long-term debt base, which is typical for a capital-intensive business. As of September 2025, the Long-Term Debt and Capital Lease Obligation was $12,000 million, dwarfing the Short-Term Debt and Capital Lease Obligation of $1,216 million. This preference for long-term financing gives the company stability and predictable interest payments, which is smart when facing the current cyclical trough in the petrochemicals market.

Still, the market is cautious. In July 2025, S&P Global Ratings affirmed the company's solid 'BBB' long-term issuer credit rating and 'A-2' short-term rating, but they revised the outlook to Negative from stable. This negative outlook is a direct reflection of the expectation that the prolonged industry oversupply, especially from China, will keep their EBITDA and credit metrics under pressure into 2026. The company is committed to maintaining its strong investment grade rating, which means they will likely prioritize debt reduction or stable dividend payouts over aggressive share buybacks or new debt-funded growth until the cycle improves.

LyondellBasell Industries N.V. actively manages its debt portfolio, as evidenced by a Prospectus Supplement for Debt Securities filed in late October 2025. They are balancing debt financing for large, long-life assets with equity funding that maintains a strong dividend-a quarterly dividend of $1.37 per share was declared in November 2025. This is how they keep shareholders happy while managing a cyclical, capital-heavy business. For a deeper dive into who is buying and selling the stock right now, check out Exploring LyondellBasell Industries N.V. (LYB) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You want to know if LyondellBasell Industries N.V. (LYB) has the immediate cash to cover its short-term bills, and honestly, the picture is one of cautious stability, not excess. The company's liquidity ratios, particularly the quick ratio, suggest a tight but manageable position, which is common in the capital-intensive chemicals industry. Still, their recent operating cash flow has shown a strong rebound, which is the real engine of their near-term financial health.

As of the Trailing Twelve Months (TTM) ending September 30, 2025, LyondellBasell Industries N.V.'s Current Ratio sits at 1.57. This means the company has $1.57 in current assets for every dollar of current liabilities. That's comfortably above the 1.0 benchmark, but it's a dip from the 1.84 seen in the prior fiscal year, reflecting the challenging market environment they've been navigating. Here's the quick math on their immediate, most liquid position:

• Current Ratio (TTM Sep 2025): 1.57
• Quick Ratio (TTM Sep 2025): 0.93

The Quick Ratio (or acid-test ratio), which strips out inventory-often the least liquid current asset-is 0.93. This is just under the preferred 1.0, and it highlights the business's dependence on selling its inventory, which was valued at $4,568 million as of June 30, 2025, to fully cover its immediate obligations. That's a key risk to watch; if demand softens, moving that inventory quickly becomes harder. Inventory is a major component of their working capital.

The company's Working Capital (Current Assets minus Current Liabilities) remains substantial. Based on the June 30, 2025, balance sheet, LyondellBasell Industries N.V. held $11,076 million in Total Current Assets and $6,244 million in Total Current Liabilities. This results in a positive working capital of approximately $4,832 million. This is a solid buffer, but the trend has been a slight contraction from the higher ranges seen in previous periods, which is consistent with their focus on managing working capital as part of their Cash Improvement Plan.

Cash flow trends are where the story gets more interesting, especially as they execute their cost-reduction strategy. In the third quarter of 2025 alone, LyondellBasell Industries N.V. generated a strong $983 million in cash from operating activities (OCF). This OCF surge is a significant turnaround from the $579 million use of cash in the first quarter of 2025, showing management's focus on cash generation is paying off.

The cash deployment is balanced, but shareholder returns are a priority. To give you a concrete view of the Q3 2025 cash flow picture:

The company is managing its capital expenditures (CapEx), with $406 million invested in Q3 2025. They are also committed to shareholder returns, distributing $443 million in dividends in the same quarter. The good news is that the Q3 OCF of $983 million easily covered both the CapEx and the dividend payout, which is a defintely a sign of a healthy, self-funding operation in the near-term. They've also been clear that their Cash Improvement Plan is on track to deliver a $600 million target in 2025, which should further strengthen free cash flow.

Overall, LyondellBasell Industries N.V. has a solid liquidity position, anchored by positive working capital and a strong recent quarter of operating cash flow. The main concern is the Quick Ratio below 1.0, which means they are relying on their inventory to meet all short-term debt, but the significant OCF generation provides a strong counter-balance to this structural risk. For a deeper dive into the company's strategic direction, you should check out the full post on Breaking Down LyondellBasell Industries N.V. (LYB) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at LyondellBasell Industries N.V. (LYB) after a rough year, and the valuation picture is complex: the stock looks cheap on historical multiples, but that low price is a direct result of severely depressed earnings. The market consensus is a 'Hold,' reflecting this tension between a low price and ongoing cyclical headwinds in the chemicals sector.

Our analysis suggests LyondellBasell Industries is currently trading at a discount based on its price-to-book value, but the extremely high dividend payout ratio signals a near-term risk to the dividend's sustainability if earnings don't rebound quickly. You need to look past the simple P/E ratio, which is defintely distorted by the recent earnings slump.

Key Valuation Multiples: Undervalued or Overvalued?

When we look at traditional valuation metrics as of November 2025, LyondellBasell Industries appears inexpensive compared to its historical averages, which is typical for a cyclical company at the bottom of its cycle. The trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio is not meaningful right now because the company reported negative earnings per share (EPS) for the TTM period ending September 2025, a clear sign of the industry's downturn. Here's the quick math on the forward-looking metrics:

• Forward P/E Ratio: The forward P/E sits at approximately 12.99. This is based on expected 2025 earnings and is below the broader market average, suggesting the stock is undervalued if the earnings forecast holds.
• Price-to-Book (P/B) Ratio: The P/B is low at 1.33. This ratio compares the market value to the book value of assets, and a value this low suggests the market is pricing the company at only a slight premium to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA is around 10.24. This is a crucial metric for capital-intensive industries like chemicals; while it's higher than the P/B suggests, it still indicates a reasonable valuation relative to the company's operating cash flow generation before debt and non-cash charges.

Stock Price Volatility and Analyst Consensus

The stock price trend over the last 12 months tells a story of significant investor pessimism. Over the year leading up to November 2025, LyondellBasell Industries' stock price has decreased 47.59%. The 52-week high was a lofty $85.25, while the recent closing price hovered around the low $43 to $44 range.

This sharp decline maps directly to the challenging operating environment. Still, Wall Street analysts are not panicking; the consensus rating from approximately twenty brokerages is a 'Hold' or 'Neutral.' The average 12-month price target is approximately $57.19, implying a potential upside if the company can execute its strategy, which you can read more about in their Mission Statement, Vision, & Core Values of LyondellBasell Industries N.V. (LYB).

Dividend Yield and Payout Sustainability

The dividend metrics are a major point of discussion for LyondellBasell Industries. The company maintains a high annual dividend of $5.48 per share, which translates to a substantial dividend yield of about 12.23% as of late 2025.

But here's the caveat: the dividend payout ratio is dangerously high. Due to the negative TTM earnings, the trailing payout ratio is an alarming 3.15 (or 315%). This means the company is paying out more than three times its net income in dividends, effectively funding the dividend from cash reserves or new debt. This is not a sustainable long-term structure. A high yield is attractive, but a payout ratio over 100% signals a high risk of a future dividend cut if the industry cycle doesn't turn up soon.

Risk Factors

You're looking at LyondellBasell Industries N.V. (LYB) in late 2025, and the core takeaway is this: the company is navigating the deepest cyclical downturn in decades, but its aggressive cost-cutting and portfolio moves are providing a financial firewall. The biggest near-term risk remains the prolonged weakness in Europe and feedstock volatility, but the company's $1.1 billion cash improvement target over 2025-2026 shows a clear path to resilience.

External Risks: The Prolonged Petrochemical Downturn

The primary risk facing LyondellBasell is the industry's extended downturn, which has compressed margins globally. We saw this hit their financials hard in Q3 2025, where the company reported a net loss of $890 million. This loss was largely driven by $1.2 billion in non-cash asset write-downs across the European and Advanced Polymer Solutions segments, a direct result of the weak European petrochemical and global automotive markets. It's a tough environment; honestly, this is the longest downturn many seasoned analysts have seen.

On the operational side, you also have to factor in the persistent pressure from volatile input costs. For Q4 2025, management expects higher natural gas and feedstock costs in North America to squeeze integrated polyolefins margins, while European demand is anticipated to remain subdued. Plus, global oversupply and import competition continue to pressure polymer prices, making it harder to push through price increases.

• Weak European demand is a major headwind.
• Feedstock costs are rising in North America.
• Global oversupply keeps a lid on prices.

Operational and Strategic Execution Challenges

While the external environment is rough, LyondellBasell also faces risks tied to its own strategic transformation. The company is actively shedding non-core and underperforming assets, which introduces execution risk. For instance, the planned sale of four European assets is expected to result in a significant loss of between $700 million and $900 million upon closing. This is the cost of upgrading the portfolio, but it still impacts the balance sheet.

Another key strategic risk is the delay of the $2.5 billion Flex-2 ethylene cracker project. While this delay is a smart, disciplined capital allocation move-reducing 2025 CAPEX guidance by $200 million to $1.7 billion-it pushes out the expected long-term benefits of a cost-advantaged asset. You're trading near-term cash preservation for deferred growth.

Finally, there is the risk of operational downtime. To align production with weak global demand and conduct necessary maintenance, the company is targeting lower operating rates in Q4 2025, including an estimated 60% for European O&P assets. This planned downtime, like the 40-day pause at the Wesseling cracker, is financially prudent but defintely impacts quarterly volumes.

Mitigation Strategies and Financial Fortitude

The good news is that management is not just waiting for the cycle to turn; they are executing a comprehensive, multi-layered mitigation plan. They are on track to achieve $1 billion in recurring annual EBITDA by the end of 2025 through their Value Enhancement Program (VEP). This is a structural change, not a one-time fix.

Also, the Cash Improvement Plan (CIP) is proving to be a powerful tool. The target for incremental cash flow has been expanded to $600 million for 2025, and at least $1.1 billion over 2025 and 2026. Here's the quick math on the 2025 target: it includes a $200 million fixed cost reduction and a $200 million reduction in working capital. They are finding cash everywhere.

This focus on cash generation-which resulted in a strong $983 million cash from operating activities in Q3 2025-allows LyondellBasell to maintain a strong balance sheet with $1.8 billion in cash and equivalents and $6.5 billion in available liquidity at the end of Q3 2025. This financial fortitude is what allows them to continue returning $443 million to shareholders through dividends in Q3 2025. You can learn more about the full financial picture in our detailed post: Breaking Down LyondellBasell Industries N.V. (LYB) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at LyondellBasell Industries N.V. (LYB) in a challenging petrochemical cycle, so the real question is how they pivot for the upswing. The direct takeaway is that while near-term revenue is flat, the company's aggressive cost-cutting and strategic shift to higher-margin, sustainable products are set to drive a significant earnings rebound.

The core of their growth plan rests on a disciplined three-pillar strategy: grow the core, build a profitable Circular & Low Carbon Solutions (CLCS) business, and step up performance. This isn't just talk; they are executing a $600 million Cash Improvement Plan (CIP) for 2025, plus the Value Enhancement Program (VEP) is on track to deliver at least $750 million of recurring annual EBITDA improvement by year-end 2025. That's a powerful internal lever.

Here's the quick math on the near-term outlook: analysts project full-year 2025 revenue to land around $30.16 billion, with diluted earnings per share (EPS) estimated at $2.47. To be fair, the revenue projection reflects a tough market, but the earnings number suggests the operational discipline is starting to hit the bottom line. For context, Q3 2025 adjusted EPS was already strong at $1.01, beating estimates of $0.81. They are managing the cycle defintely well.

• Product Innovations: Investing in MoReTec-1, their first commercial-scale advanced recycling plant in Germany, which is designed to recycle the plastic packaging waste generated by over 1.2 million German citizens per year. This proprietary technology is a key differentiator in the growing circular economy (CLCS).
• Market Expansions: Strengthening their U.S. Gulf Coast position with a final investment decision to grow propylene production, which leverages their existing, cost-advantaged infrastructure. They are also optimizing their global footprint by securing cost-advantaged ethane and naphtha supplies in Saudi Arabia.
• Portfolio Upgrade: The sale of four European assets is progressing, which is part of their strategy to exit non-core, lower-return businesses. This sharpens their focus on leading positions.

This strategic re-tooling is what gives LyondellBasell Industries N.V. (LYB) a durable competitive advantage. Their low-cost U.S. production base, fueled by cheap natural gas feedstocks, provides a structural resilience against global competitors. Plus, their technology leadership in polyolefin technologies is a strong barrier to entry. The future is less about volume and more about margin, and their move into CLCS, aiming for at least $1 billion in incremental EBITDA by 2030 from this segment, shows they understand that shift.

If you want to dig deeper into who is buying into this strategy, you can read Exploring LyondellBasell Industries N.V. (LYB) Investor Profile: Who's Buying and Why?

The table below summarizes the key financial drivers for the year, showing where the focus is:

What this estimate hides is the potential for a faster-than-expected recovery in durable goods demand, which could push that EPS number higher. Still, the company is prioritizing an investment-grade balance sheet and shareholder returns, having returned $443 million to shareholders through dividends in Q3 2025 alone.