Hold Rating for Westlake Chemical Amidst Operational Challenges and Tariff Uncertainties

In a report released yesterday, Michael Sison from Wells Fargo downgraded Westlake Chemical (WLK – Research Report) to a Hold, with a price target of $76.00.

Michael Sison has given his Hold rating due to a combination of factors affecting Westlake Chemical’s performance. The company is facing challenges with lower-than-expected operating rates for PVC and PE in North America, which started the second quarter of 2025 on a weaker note. This situation is compounded by tariff uncertainties that have impacted export demand, leading to a reduction in pricing and potential further declines.
Additionally, the earnings outlook for Westlake Chemical has been revised downward, with significant reductions in EPS and EBITDA estimates for 2025. The valuation of the company’s stock has also been adjusted, with the price target reduced to $76 based on a 2025 estimated EV/EBITDA multiple. Despite some potential for improvement in operating rates later in the year, macroeconomic uncertainties and pressure on margins suggest a balanced risk/reward scenario, justifying the Hold rating.

Sison covers the Basic Materials sector, focusing on stocks such as Westlake Chemical, Air Products and Chemicals, and Albemarle. According to TipRanks, Sison has an average return of -1.0% and a 43.18% success rate on recommended stocks.

In another report released on May 14, Piper Sandler also maintained a Hold rating on the stock with a $100.00 price target.