Westlake: Ethane Cost Advantage and Housing Recovery Drive Compelling Medium-Term Upside

Analyst Bhavesh Lodaya of BMO Capital reiterated a Buy rating on Westlake Corporation, retaining the price target of $127.00.

Bhavesh Lodaya has given his Buy rating due to a combination of factors tied to Westlake’s structural advantages and earnings outlook. He highlights the company’s predominantly U.S.-based, ethane-driven cost position, which allows Westlake to capitalize on tighter global resin supply and higher export prices, particularly as Middle East disruptions push global cost curves upward, supporting margin expansion in the next few quarters.

He also underscores management’s confidence in a substantial year-over-year EBITDA increase by 2026, supported by strong leverage to PVC and caustic volumes and pricing, as well as a cyclical recovery in U.S. housing and infrastructure-related demand. Combined with Westlake’s strong balance sheet and the ongoing shift toward higher-quality housing and infrastructure businesses, Lodaya views the medium-term earnings trajectory as upward and the stock’s risk/reward profile as compelling for investors.

In another report released on March 26, Truist Financial also assigned a Buy rating to the stock with a $127.00 price target.