LyondellBasell (LYB) Makes Car Parts From Auto Plastic Waste

LyondellBasell LYB recently announced that it has collaborated with Audi in which seatbelt buckle covers in Audi ’s Q8 e-tron will be made from LYB plastic recycled from mixed automotive plastic waste. This endeavor is part of Audi’s PlasticLoop project and helps close the loop for recycling automotive plastic waste into new parts. The alliance will help reduce the fossil-based primary materials required for Audi Q8 e-tron’s manufacturing. Moreover, the collaboration keeps valuable feedstocks in a circular loop. The irreparable plastic components from customer vehicles are chemically recycled into pyrolysis oil. Further, to produce new polymers, LyondellBasell uses this pyrolysis oil as a raw material instead of virgin fossil feedstocks to manufacture new plastics. These recycled materials are then used in the Audi product. There’s no distinctive difference between materials produced from pyrolysis oil and those from virgin materials. Both possess the same quality and properties. Applying this method, LyondellBasell, Audi and the chemical recycler SynCycle could achieve the recycling of a stream of material that was hitherto mainly suitable for energy recovery. This will be the first time that LYB will use chemical recycling to reprocess mixed automotive plastic waste and use it to create plastic content for automotive interior applications.  In the third quarter, inflation, high-energy costs and softer seasonal demand posed difficulties for LYB. However, demand for its products used in consumer packaging remained stable. Management stated that LYB’s diverse business portfolio, strong balance sheet and solid liquidity are enabling it to navigate the market turbulences.   LyondellBasell posted revenues of $12.25 billion for the third quarter of 2022, missing the Zacks Consensus Estimate by 7.7%. This also compares unfavorably with the year-ago revenues of $12.7 billion. Quarterly earnings were reported at $1.96 per share, missing the Zacks Consensus Estimate of $2.96. The year-ago quarter’s adjusted earnings were reported to be $5.25 per share. The Zacks Consensus Estimate for LyondellBasell’s current-year revenues is pegged at $50.87 billion, indicating 10.2% growth from the year-ago actuals. The same for earnings is pegged at $12.32 per share, suggesting a 32.3% decline from the prior-year reading. LYB’s trailing four-quarter average surprise is negative 5%. 

Price Performance

Shares of LyondellBasell have dipped 2.6% in the past year compared with the 0.8% decline of the industry.

 

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Zacks Rank and Stocks to Consider

LyondellBasell currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the basic materials space include Bunge Limited BG, Sociedad Quimica y Minera de Chile S.A. SQM and Alpha Metallurgical Resources AMR. While BG and SQM flaunt a Zacks Rank #1 (Strong Buy), AMR holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Bunge Limited has an expected earnings growth rate of 7.2% for the current year, with an earnings estimate of $13.89. BG’s estimated earnings have been revised 7.2% upward in the past 60 days. Its trailing four-quarter average surprise is 18.7%. The stock has gained 20.4% during the year. The Zacks Consensus Estimate for Sociedad’s 2022 earnings per share is pegged at 520% growth from the year-ago reading. The estimates have moved 7.3% north in the past 30 days. SQM has a trailing four-quarter earnings surprise of 37.4%, on average. Its shares have surged 51.9% in the past year. Alpha Metallurgical Resources has a projected current-year earnings growth rate of 413% from the prior-year reported number. AMR has a trailing four-quarter earnings surprise of 1%, on average. Shares of AMR have skyrocketed 267.8% in a year.

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