LYB GF Score 66: Weak Growth and High Leverage Weigh on Rating
LyondellBasell scores 66 on the GF Score composite, pulled down by a 1/10 growth rank and debt-to-EBITDA at 7.47. Value investors face a discount that may not offset balance-sheet strain.
Alpha Score of 55 reflects moderate overall profile with moderate momentum, strong value, poor quality, moderate sentiment.
LyondellBasell Industries (NYSE: LYB) received a GF Score of 66 out of 100 from GuruFocus, a composite ranking that signals poor future outperformance potential. The score blends five factors, financial strength, profitability, growth, GF Value, and momentum, backtested over the 2006–2021 period. Two components weigh heavily: growth scores 1 out of 10, financial strength scores 5 out of 10. Profitability earns 7 out of 10 and GF Value earns 9 out of 10, but the weak areas dominate the composite.
The debt metrics stand out. LyondellBasell's interest coverage ratio of 4.58 trails 68.8% of Chemicals peers. Benjamin Graham typically looked for coverage of at least five. The Altman Z-Score sits at 1.91, below the 2.99 safe threshold. A Z-Score below 1.81 would signal potential distress. The cash-to-debt ratio is 0.19, indicating limited liquidity to service obligations. More telling is the debt-to-EBITDA ratio of 7.47. Joel Tillinghast, in his book "Big Money Thinks Small," warned that a ratio above 4 can be a red flag unless tangible assets back the debt. GuruFocus flags debt-to-EBITDA above 4 as a red flag; LyondellBasell's ratio is worse than 86.9% of 1,400 companies in the Chemicals industry. The company carries a market cap of roughly $20.7 billion on sales of about $31.2 billion, with an operating margin of 7.82%.
Growth has been the other weak pillar. Revenue declined 15.2% annually over the past three years, underperforming 89% of Chemicals companies. EBITDA contracted 40.4% over three years and 20.5% over five. The predictability rank is just one star out of five, reflecting low confidence in revenue and earnings consistency. LyondellBasell exited its refining business in 2025 to focus on chemicals and circular and low-carbon solutions. So far, the top-line numbers reflect a downcycle in commodity chemicals rather than a structural recovery.
The GF Value rank of 9 out of 10 suggests the stock is reasonably priced relative to its intrinsic value. Profitability scores 7 out of 10, reflecting the durability of the core chemicals franchise. Still, the 1 out of 10 growth rank and 5 out of 10 financial strength rank pull the composite to 66.
AlphaScala's own measure, the Alpha Score, puts LyondellBasell at 55 out of 100, a Moderate label. GuruFocus flags debt-to-EBITDA above 4 as a red flag unless tangible assets cover the debt.
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