Bhavesh Lodaya, an analyst from BMO Capital, maintained the Hold rating on Westlake Chemical (WLK – Research Report). The associated price target was lowered to $103.00.
Bhavesh Lodaya has given his Hold rating due to a combination of factors affecting Westlake Chemical’s current and future performance. The company’s first-quarter results were below expectations, primarily due to higher costs in the PEM segment and unplanned downtime. Additionally, the HIP segment also faced challenges with increased costs and an unfavorable mix, leading management to lower its full-year guidance for this segment.
Looking forward, Westlake Chemical is expected to face continued pressure from higher raw material costs, tariffs impacting exports, and a weak housing market, which could dampen the anticipated seasonal volume increase. While the company’s balance sheet remains strong, management is focusing on internal measures such as cost-cutting and reduced capital expenditures to navigate these challenges. Despite attractive valuation multiples, the stock may remain under pressure until macroeconomic conditions and earnings stabilize.