LSB Industries (NYSE:LXU) shares fell more than 5% intra-day today after Deutsche Bank analysts lowered their price target for the company to $9 from $11 while maintaining a Buy rating. The analysts noted that LSB expects Q3 EBITDA to rise significantly year-over-year, excluding $15 million in turnaround expenses, driven by higher prices and reduced costs for natural gas and other inputs. However, the quarter-over-quarter EBITDA is anticipated to decline by 62%.
LSB is also making progress on its two low-carbon ammonia projects. The company recently signed a five-year agreement to supply up to 150,000 metric tons of low-carbon ammonium nitrate solution (ANS) to Freeport Minerals, with deliveries starting in January 2025 from its El Dorado, AR facility. The contract includes a premium pricing for the low-carbon ANS compared to the conventional version. The El Dorado Low-Carbon Ammonia Project, in partnership with Lapis Energy, is expected to be operational by Q1 2026, reducing LSB’s Scope 1 CO2 emissions by approximately 25% and generating an additional $15-$20 million in EBITDA.