Westlake Corporation (WLK) AI Stock Analysis

• Market Cap: $9.17B
• Dividend Yield: 2.91%
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.89
• Revenue Growth: -1.27%
• EPS Growth: 48.34%
• Country: US
• Employees: 15,540
• Sector: Basic Materials
• Sector Strength: 67
• Industry: Chemicals - Specialty
• EPS (TTM): -0.31
• Shares Outstanding: 128,238,020
• 10 Day Avg. Volume: 1,374,243
• 30 Day Avg. Volume: 1,283,859
• PEG Ratio: -0.72
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 119.31
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $92.87
• Price Target Upside: 29.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 56 Neutral
• Price Target: $80.00 ▲(11.13%Upside)

Westlake Chemical scores a 56.2, reflecting a balanced but cautious outlook. The company's strong balance sheet and robust HIP segment performance are key strengths, but financial pressures, particularly in cash flow and PEM segment challenges, weigh on the score. Technical analysis suggests weak momentum, and while valuation offers some dividend appeal, the P/E ratio indicates potential overvaluation. Overall, while there are growth opportunities, caution is advised due to operational challenges.

Positive Factors

Balance sheet strength

The stock still warrants a Buy rating given its strong balance sheet.

Chlor-alkali pricing

In chlor-alkali, there has been $20/dst of positive pricing which should help 2Q ECU margins.

Net leverage and strategy

The company's net leverage is projected to be just 1.1x by year-end, allowing management to capitalize on the downturn through buybacks and acquisitions.

Negative Factors

Housing market impact

PVC prices are not expected to accelerate seasonally due to weakness in the housing market.

Industry operating rates

Analyst downgrades WLK due to weaker industry operating rates for PVC and PE than expected.

PE and PVC pricing

PVC and PE pricing fell with potential for further declines, leading to reduced earnings estimates.

Westlake Corporation Business Overview & Revenue Model

Company Description

Westlake Corporation (WLK) is a global manufacturer and supplier of petrochemicals, polymers, and building products. The company operates in two main segments: Olefins and Vinyls. The Olefins segment produces ethylene, polyethylene, and other related products, while the Vinyls segment focuses on the production of polyvinyl chloride (PVC), vinyl chloride monomer (VCM), and other related chemicals. Westlake serves a diverse range of industries including construction, automotive, and packaging, providing essential materials for everyday applications.

How the Company Makes Money

Westlake Corporation generates revenue primarily through the sale of petrochemical and polymer products. The Olefins segment contributes to revenue by producing and selling ethylene and polyethylene, which are key components used in various consumer and industrial products. The Vinyls segment generates earnings through the production and sale of PVC and VCM, which are used extensively in construction and infrastructure projects. The company benefits from strategic partnerships and long-term contracts with key industrial players, optimizing its supply chain and ensuring a stable demand for its products. Additionally, Westlake's global footprint allows it to tap into diverse markets, further enhancing its revenue streams.

Westlake Corporation Financial Statement Overview

Summary

Westlake Chemical's financial results display a mix of strengths and challenges. While the company maintains a robust balance sheet with low leverage and substantial equity, its income statement reflects margin pressures and revenue declines. Cash flow management poses potential risks, as evidenced by the notable drop in free cash flow. Strategic focus on operational efficiency and cash flow stabilization could enhance financial resilience moving forward.

Income Statement

Westlake Chemical has shown a fluctuating revenue trajectory with a recent decline from $12.548 billion in 2023 to $12.142 billion in 2024. The gross profit margin in 2024 stands at 16.11%, with a net profit margin of 4.96%. Notably, there was a significant dip in EBIT and EBITDA margins, reflecting increased operational challenges. However, the company demonstrated resilience in maintaining profitability amidst a challenging environment.

Balance Sheet

The balance sheet reveals a solid equity base with stockholders' equity at $10.527 billion in 2024, translating to an equity ratio of 50.73%. The debt-to-equity ratio is low at 0.068, indicating conservative leverage use. The company has considerable cash reserves, enhancing financial stability and providing flexibility for future investments.

Cash Flow

Free cash flow has decreased significantly from $1.302 billion in 2023 to $306 million in 2024, representing a substantial contraction in liquidity. The operating cash flow to net income ratio is strong at 2.18, highlighting effective cash generation relative to net income. However, the decline in free cash flow growth underscores potential cash management pressures.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.01B	12.14B	12.55B	15.79B	11.78B	7.50B
	Gross Profit
1.69B	1.96B	2.22B	4.07B	3.50B	1.02B
	EBIT
624.00M	875.00M	729.00M	3.05B	2.80B	429.00M
	EBITDA
1.90B	2.21B	1.96B	4.18B	3.69B	1.25B
	Net Income Common Stockholders
388.00M	602.00M	479.00M	2.25B	2.02B	330.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.23B	2.92B	3.30B	2.23B	1.91B	1.31B
	Total Assets
20.55B	20.75B	21.04B	20.55B	18.46B	13.84B
	Total Debt
4.88B	5.28B	5.52B	4.88B	5.18B	3.57B
	Net Debt
2.65B	2.36B	2.21B	2.65B	3.27B	2.25B
	Total Liabilities
10.09B	9.71B	10.27B	10.09B	9.93B	7.26B
	Stockholders Equity
9.93B	10.53B	10.24B	9.93B	7.96B	6.04B
Cash Flow		Free Cash Flow
84.00M	306.00M	1.30B	2.29B	1.74B	772.00M
	Operating Cash Flow
1.07B	1.31B	2.34B	3.40B	2.39B	1.30B
	Investing Cash Flow
-1.16B	-1.00B	-1.04B	-2.48B	-3.21B	-509.00M
	Financing Cash Flow
-691.00M	-650.00M	-245.00M	-587.00M	1.44B	-216.00M

Westlake Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 71.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WLK, the sentiment is Negative. The current price of 71.99 is below the 20-day moving average (MA) of 76.03, below the 50-day MA of 84.88, and below the 200-day MA of 114.35, indicating a bearish trend. The MACD of -4.35 indicates Negative momentum. The RSI at 35.75 is Neutral, neither overbought nor oversold. The STOCH value of 63.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WLK.

Westlake Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVNT	72 Outperform	$3.35B	33.83	4.32%	2.89%	3.58%	-5.17%
RPM	72 Outperform	$14.83B	22.96	25.53%	1.72%	-0.61%	15.06%
EMN	67 Neutral	$9.29B	10.25	16.16%	4.06%	2.78%	1.50%
LYB	65 Neutral	$17.90B	17.23	7.19%	9.57%	-6.53%	-50.08%
WLK	56 Neutral	$9.17B	24.04	3.71%	2.91%	-1.27%	48.34%
Sector *	51 Neutral	$2.02B	-1.12	-21.36%	3.65%	2.87%	-30.54%
SQM	48 Neutral	$8.67B	15.18	12.17%	0.47%	-28.74%	53.25%

Westlake Corporation Corporate Events

Westlake Chemical Approves Board Members and Auditor

At the 2025 Annual Meeting held on May 8, 2025, Westlake Corporation’s stockholders voted on two key matters. The election of four board members and the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, were both approved, indicating continued stability and oversight in the company’s governance and financial auditing processes.

The most recent analyst rating on (WLK) stock is a Hold with a $110.00 price target. To see the full list of analyst forecasts on Westlake Chemical stock, see the WLK Stock Forecast page.

Westlake Chemical Reports Q1 2025 Financial Losses

Westlake Corporation, a major player in the chemical industry, reported its financial results for the first quarter of 2025, revealing a challenging period with a net loss of $40 million and a decrease in EBITDA margin to 10%. The company’s Housing and Infrastructure Products segment showed resilience with a 20% EBITDA margin, while the Performance and Essential Materials segment faced difficulties, contributing to the overall operational loss.

Westlake Chemical Awards RSUs to Executive VP

On April 11, 2025, Westlake Corporation’s Board of Directors approved a special award of restricted stock units (RSUs) valued at $1,500,000 for Robert F. Buesinger, Executive Vice President of the Performance and Essential Materials Segment. The RSUs will fully vest on December 31, 2026, contingent upon Mr. Buesinger’s continued full-time employment with the company, highlighting the company’s commitment to retaining key leadership and potentially impacting its strategic direction.