Sell Chemical Stocks, but Not Because of the Economy or Plastic Bans

July 22, 2019

Brokerage firm Nomura downgraded two chemical stocks Monday morning. The big problem for the economically sensitive chemical sector isn’t the economic weakness, though. And it isn’t the specter of single-use plastic bans that could destroy demand far in the future. The problem is oversupply.
Analyst Aleksey Yefremov reduced his rating on LyondellBasell Industriesstock (ticker: LYB) to Neutral—the Nomura equivalent of a Hold rating—from Buy, and cut his price target on the stock to $93 from $107. What's more, he cut his rating on Westlake Chemical stock (WLK) to Reduce—the equivalent of a Sell rating—from Neutral, and trimmed his price target by a dollar to $57, which is 16% below recent levels. He also expressed caution regarding Dow stock (DOW), but maintained his Buy rating, and thinks the shares can hit $53 over the coming months. Still, his target represents only 4% upside from recent levels. Yefremov sees too much plastic-making capacity coming online in the Southern U.S.

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RAR Resin and Chemical Industries

RAR Resin is a member of RAR HOLDING one of the leading Petro-Chemical Groups in EMEA Region. The holding was ranked 72nd in the world and third in the Arab World. The company operates through its fully automated Resin and White Spirit plants located in Dubai-UAE, Lebanon, KSA, Nigeria, Iraq, and Kuwait.

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RAR Resin and Chemical Industries

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