An independent two-stage DCF analysis by a frontier AI model.
LyondellBasell's intrinsic value is heavily dependent on the current point in the economic cycle. The company's recent cash flow generation of roughly $384 million highlights the volatility inherent in its capital-intensive business model, which is highly sensitive to the spread between raw material costs and end-product pricing.
While the company maintains a formidable industrial footprint and valuable process technology licenses, a strict discounted cash flow analysis based on current low-cycle cash flows yields a conservative valuation. The substantial negative margin of safety suggests the market is pricing in a significant future cyclical recovery that is not currently reflected in trailing cash generation metrics.
A 4.0% growth rate is applied, reflecting the cyclical and mature nature of the global chemicals market. This modest projection assumes stable industrial demand while acknowledging the structural headwinds facing traditional plastics.
A 10.0% discount rate is utilized to account for the inherent volatility and cyclicality of the commodity chemicals sector, as well as the company's sensitivity to macroeconomic shifts and raw material price fluctuations.
A 2.0% terminal rate represents a conservative, long-term assumption that aligns with historical inflation and slow, steady-state global GDP expansion.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% |
|---|---|---|---|---|---|
| 1.0% | $20.05 | $17.54 | $15.59 | $14.03 | $12.76 |
| 1.5% | $21.59 | $18.71 | $16.51 | $14.77 | $13.36 |
| 2.0% | $23.39 | $20.05 | $17.54 | $15.59 | $14.03 |
| 2.5% | $25.51 | $21.59 | $18.71 | $16.51 | $14.77 |
| 3.0% | $28.06 | $23.39 | $20.05 | $17.54 | $15.59 |
■ Undervalued vs current price ■ Overvalued vs current price
A 4.0% rate reflects a balanced view of a mature, slow-growing industrial sector, assuming average through-cycle performance rather than peak cyclical growth.
A higher 10.0% discount rate was applied to capture the elevated cyclical risks and macroeconomic sensitivities inherent in the global chemicals market.
No. This analysis is a rigid mathematical model based on trailing data. It does not account for unpredictable shifts in the global macroeconomic cycle, energy markets, or sweeping regulatory changes affecting the plastics industry.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.