LSB Industries Poised to Benefit From Favorable Nitrogen Market, RBC Says

MT Newswires Live11-10

LSB Industries (LXU), a producer of fertilizer and industrial chemicals, is expected to benefit from favorable nitrogen market fundamentals and improving operations, supporting strong cash generation in 2027 and 2028 and providing opportunities for self-funded growth, RBC Capital Markets said Sunday in a report.

RBC expects nitrogen demand to remain supportive over the next three to six months amid restricted supply, while operations continue to benefit from improved plant reliability, higher operating rates and lower costs.

The company's El Dorado carbon capture project, expected to begin operations in H2 2027, could add $25 million to $30 million in annual EBITDA, and a potential expansion at the facility could contribute an additional $20 million to $30 million, the report said.

RBC raised its 2027 EBITDA estimate to $224 million from $191 million and expects LSB's $203 million cash balance at the end of Q3 to help fund growth initiatives.

RBC reiterated its outperform rating on LSB stock and its $13 price target.

Price: 10.80, Change: +0.20, Percent Change: +1.89

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