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Westlake Chemical PRN (WLKP)
NYSE:WLKP
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Westlake Chemical PRN
(NYSE:WLKP)
Rating:72Outperform
Price Target:
$25.00
▲(13.53%Upside)
Westlake Chemical PRN (WLKP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$786.17M
Dividend Yield8.56%
Average Volume (3M)32.58K
Price to Earnings (P/E)15.0
Beta (1Y)0.18
Revenue Growth-6.76%
EPS Growth-3.19%
CountryUS
Employees2,169
SectorBasic Materials
Sector Strength73
IndustryChemicals
Share Statistics
EPS (TTM)0.14
Shares Outstanding35,238,556
10 Day Avg. Volume34,861
30 Day Avg. Volume32,576
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)0.97
Price to Sales (P/S)0.00
P/FCF Ratio2.10
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue0.16
Enterprise Value/Gross Profit1.97
Enterprise Value/Ebitda0.39
Forecast
1Y Price Target
$26.00Price Target Upside18.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Westlake Chemical PRN Business Overview & Revenue Model
Company DescriptionWestlake Chemical Partners LP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company's ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. The company was incorporated in 2014 and is headquartered in Houston, Texas.
How the Company Makes MoneyWestlake Chemical Partners LP generates revenue primarily through the production and sale of ethylene, which is integral to the manufacturing of plastics and other chemicals. The company employs a fee-based revenue model, where it earns fees from Westlake Chemical Corporation for processing ethane into ethylene. This arrangement ensures a steady income stream, as the partnership has long-term supply agreements in place with Westlake Chemical Corporation, minimizing market volatility and providing predictable cash flows. Additionally, WLKP’s strategic location and efficient production processes contribute to its profitability by optimizing logistics and reducing operational costs.
Westlake Chemical PRN Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: -5.57%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with both consistent positive cash flow and successful completion of planned projects, but also highlighted a significant decline in net income and cash flow due to planned maintenance. The sentiment is neutral as the company maintains strong leverage metrics and consistent distributions despite facing operational challenges and market uncertainties.Q1-2025 Updates
Positive Updates
Consistent Cash Flow and Distributions
The partnership reported its 43rd consecutive quarterly distribution since its IPO in July 2014, with a 71% growth in distributions from the original minimum quarterly distribution. The partnership's predictable fee-based cash flow continues to prove beneficial, with a cumulative distribution coverage ratio of approximately 1.1 times since the IPO.
Successful Completion of Petro 1 Turnaround
The planned turnaround at the Petro 1 ethylene unit was successfully completed, positioning the company for solid production levels in the future, with no further planned turnarounds in 2025 or 2026.
Strong Leverage Metrics
The company maintained strong leverage metrics with a consolidated leverage ratio of approximately 1x and a consolidated cash balance and cash investments totaling $154 million.
Negative Updates
Decline in Net Income and Cash Flow
First quarter net income was $5 million, which is $10 million below the first quarter of 2024, primarily due to lower production and sales volume resulting from the planned turnaround at Petro 1. Distributable cash flow decreased by $12 million compared to the first quarter of 2024.
Impact of Global Trade Tensions
Global trade tensions have intensified, creating a heightened atmosphere of uncertainty for businesses and investors, which could cause some market volatility.
Company Guidance
During the Westlake Chemical Partners' first quarter 2025 earnings call, the management outlined several key financial metrics and guidance. The Partnership reported a net income of $5 million or $0.14 per unit, with consolidated net income, including OpCo's earnings, at $42 million on consolidated net sales of $238 million. Distributable cash flow for the quarter was $5 million, or $0.13 per unit, reflecting a decrease of $12 million compared to the previous year, primarily due to the planned turnaround at the Petro 1 ethylene unit. The balance sheet remained robust, with a consolidated cash balance of $154 million and long-term debt of $400 million. A quarterly distribution of $0.4714 per unit was announced, marking the 43rd consecutive quarterly distribution since the IPO in 2014, with distributions having grown 71% since inception. The Partnership maintained a cumulative distribution coverage ratio of approximately 1.1 times, with no further planned turnarounds in 2025 or 2026. Despite global trade tensions, the Partnership's financial performance is supported by a fee-based cash flow structure from a take-or-pay contract that covers 95% of OpCo’s production.Westlake Chemical PRN Financial Statement Overview
Summary
Westlake Chemical PRN shows solid financial health with strong profitability and efficient cash flow management. However, the decline in revenue growth could pose a risk if not addressed.Income Statement
Westlake Chemical PRN has demonstrated stable profitability with a gross profit margin of 36.9% and a net profit margin of 5.5% for 2024. The EBIT margin is strong at 34.4%, indicating efficient cost management. However, the revenue has declined by 4.6% compared to the previous year, which could be a concern if the trend continues.75
Positive
Balance Sheet
The company maintains a healthy equity ratio of 64.4%, suggesting a strong capital structure. The debt-to-equity ratio is 0.48, indicating moderate leverage. Return on equity is relatively low at 7.5%, reflecting limited profitability on equity capital.70
Positive
Cash Flow
Westlake Chemical PRN shows robust cash flow management with a free cash flow to net income ratio of 6.99 and a strong operating cash flow to net income ratio of 7.77. Free cash flow has grown by 7.6% year-over-year, highlighting effective cash generation capabilities.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.14B | 1.19B | 1.59B | 1.21B | 966.67M |
| Gross Profit | 418.94M | 387.46M | 377.37M | 441.71M | 378.88M |
| EBITDA | 507.59M | 472.14M | 470.33M | 519.56M | 456.88M |
| Net Income | 62.39M | 54.28M | 334.83M | 401.38M | 341.12M |
Balance Sheet | |||||
| Total Assets | 1.29B | 1.32B | 1.37B | 1.48B | 1.36B |
| Cash, Cash Equivalents and Short-Term Investments | 58.32M | 58.62M | 64.78M | 17.06M | 17.15M |
| Total Debt | 399.67M | 399.67M | 399.67M | 399.67M | 399.67M |
| Total Liabilities | 458.64M | 460.59M | 468.27M | 508.00M | 441.35M |
| Stockholders Equity | 829.31M | 522.51M | 903.71M | 972.70M | 915.14M |
Cash Flow | |||||
| Free Cash Flow | 436.03M | 405.18M | 409.62M | 327.27M | 336.43M |
| Operating Cash Flow | 485.00M | 452.00M | 463.74M | 408.44M | 373.40M |
| Investing Cash Flow | -88.97M | -75.94M | -12.00M | -64.30M | 2.03M |
| Financing Cash Flow | -396.33M | -382.23M | -404.01M | -344.24M | -378.20M |
Westlake Chemical PRN Technical Analysis
Negative
22.02
Price Trends
22.27
Negative
22.54
Negative
22.47
Negative
Market Momentum
-0.04
Positive
42.78
Neutral
39.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WLKP, the sentiment is Negative. The current price of 22.02 is below the 20-day moving average (MA) of 22.27, below the 50-day MA of 22.27, and below the 200-day MA of 22.47, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 42.78 is Neutral, neither overbought nor oversold. The STOCH value of 39.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WLKP.
Westlake Chemical PRN Risk Analysis
Westlake Chemical PRN disclosed 1 risk factors in its most recent earnings report. Westlake Chemical PRN reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Westlake Chemical PRN Peers Comparison
Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $786.17M | 14.97 | 10.22% | 8.56% | -6.76% | -3.19% | |
70 Outperform | $607.84M | 7.26 | 11.26% | 2.82% | 6.03% | 5079.05% | |
56 Neutral | $611.68M | ― | -5.28% | ― | -4.23% | -259.01% | |
54 Neutral | $927.01M | ― | -8.44% | 8.55% | 4.15% | 57.25% | |
53 Neutral | $2.10B | ― | -4.46% | 9.19% | 0.02% | -43.65% | |
44 Neutral | AU$1.51B | -6.04 | -41.37% | 3.88% | -3.45% | -43.04% | |
42 Neutral | $1.32B | ― | -8638.28% | ― | 0.81% | -34.74% |
* Basic Materials Sector Average
Performance Comparison
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22.02
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TROX
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ASIX
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Westlake Chemical PRN Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Westlake Chemical PRN Reports Q1 2025 Income Decline
Negative
May 2, 2025
Westlake Chemical Partners LP announced its first quarter 2025 results, reporting a net income of $4.9 million, a significant decrease from the previous year’s $14.8 million. The decline in income and cash flow was attributed to a planned turnaround at the Petro 1 ethylene facility, which resulted in lower production and sales volumes. Despite the downturn, the company declared a quarterly distribution of $0.4714 per unit, marking the 43rd consecutive distribution. The turnaround, completed in early April, is expected to stabilize future cash flows and improve the coverage ratio, with no further turnarounds planned for several years.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.