UBS’ Bottom Quant Stocks In AI, IT, Healthcare & Others: 29 Stocks In All Sectors

19. LyondellBasell Industries N.V. (NYSE:LYB)

Number of Hedge Fund Investors In Q2 2024: 41

Sector: Materials

LyondellBasell Industries N.V. (NYSE:LYB) is a chemical company that makes and sells products such as polyethylene, polypropylene, and ethylene. Its products are used in a variety of industries such as oil refining, building materials, and food packaging. Roughly 54% of LyondellBasell Industries N.V. (NYSE:LYB)’s revenue comes through refined products, polyethylene, and polypropylene. This means that the firm is dependent quite a bit on the state of the oil industry, oil prices, automotive demand, and food sales. Consequently, the fact that LyondellBasell Industries N.V. (NYSE:LYB)’s shares are down 10.5% year to date is unsurprising as oil prices have been depressed due to the slow Chinese economy and the US consumer has continued to face the inflationary pinch. Looking ahead, a recovery in these segments could translate into tailwinds for the stock, with LyondellBasell Industries N.V. (NYSE:LYB) also benefiting from its recycling technologies.

LyondellBasell Industries N.V. (NYSE:LYB)’s management shared some growth strategies and potential catalysts during the Q3 2024 earnings call:

“The first project, subject to a final investment decision is to utilize a portion of the site for a second larger MoReTec unit. We expect that MoReTec-2 will be twice the size of our German plants with the capacity to produce 100,000 tons of cracker feedstocks. We plan to leverage upon our existing hydrotreaters at the refinery and retrofit them. This will allow us to upgrade both the recycled feedstocks coming from our MoReTec-2 unit and feedstocks from third-party suppliers for use in our olefins crackers for the production of circular and low carbon CirculenRevive polymers. The second project under consideration is to retrofit some of the other refining assets to produce renewable and bio-based feedstocks. These feedstocks would also be used in our existing olefins crackers for the production of circular and low carbon CirculenRenew polymers.

And with a substantial array of utilities, laboratories, pipelines, storage, logistical assets and other infrastructure on the 700-acre site, the refinery provides ample opportunity for investments and partnerships to support LYB’s continued growth in low-carbon feedstocks and products. Although crude refining at the site will end, we have several opportunities to repurpose the site to capture sustainable value. We are leveraging our existing cost-advantaged assets to satisfy growing market demand for Circular & Low Carbon Solutions.”