Westlake Corporation: Navigating European Challenges While Strengthening U.S. Market Position

In a report released yesterday, Bhavesh Lodaya from BMO Capital maintained a Hold rating on Westlake Corporation (WLK – Research Report), with a price target of $94.00.

Bhavesh Lodaya has given his Hold rating due to a combination of factors affecting Westlake Corporation. The company is facing challenges with its European operations, particularly with the decision to fully close its Pernis manufacturing facility in the Netherlands by 2025. This closure is part of an effort to optimize their footprint, as the plant has been operating at low capacity and is not expected to return to profitability due to market conditions, including competition from less expensive Chinese exports.
Despite these challenges, Westlake Corporation maintains a strong position in the U.S. market with a focus on chlor-alkali, PVC, and building products. The company is undergoing a structural change to enhance its business quality, particularly in the housing and infrastructure segments. While the closure in Europe is costly, the management expects to recover these expenses over the next few years through savings on fixed costs and maintenance. Overall, the risk and reward appear balanced, justifying the Hold rating.

In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $98.00 price target.

Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is neutral on the stock.