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Westlake Chemical Partners LP (WLKP)
:WLKP
US Market

Westlake Chemical PRN (WLKP) AI Stock Analysis

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Westlake Chemical PRN

(NYSE:WLKP)

Rating:72Outperform
Price Target:
$25.00
▲(12.21%Upside)
Westlake Chemical PRN is well-positioned with strong financial performance, characterized by profitability and a debt-free balance sheet. Technical analysis indicates potential downward momentum, but the stock's fair valuation and strong dividend yield provide a buffer. The earnings call highlighted both positive cash flow and challenges from planned maintenance, painting a balanced outlook. Overall, WLKP is stable with moderate growth potential in the chemicals industry.

Westlake Chemical PRN (WLKP) vs. SPDR S&P 500 ETF (SPY)

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. The company's revenue model is built around a long-term supply agreement with its parent company, Westlake Chemical Corporation, which secures a stable and predictable income stream. Additionally, WLKP benefits from third-party sales, enhancing its revenue diversity. The partnership model allows WLKP to leverage operational synergies and maintain cost efficiencies in ethylene production, further contributing to its profitability. Key factors contributing to WLKP's earnings include its strategic relationships, efficient production processes, and the consistent demand for ethylene in various industrial applications.

Westlake Chemical PRN Earnings Call Summary

Earnings Call Date:May 02, 2025
(Q1-2025)
|
% Change Since: -4.46%|
Next Earnings Date:Aug 12, 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 presents robust profitability with a healthy gross profit margin and a debt-free balance sheet. Despite a slight revenue decline, the company maintains strong cash flow generation, indicating efficient operations and a solid financial foundation.
Income Statement
78
Positive
Westlake Chemical PRN shows a healthy gross profit margin of 36.9% and a net profit margin of 11.9% in TTM (Trailing-Twelve-Months), indicating strong profitability. Although revenue decreased by 4.6% from the previous year, margins remained robust with an EBIT margin of 34.4% and an EBITDA margin of 42.1%. Despite the revenue decline, profitability remains a key strength.
Balance Sheet
85
Very Positive
The company exhibits a strong balance sheet with a debt-to-equity ratio of 0, showing no debt as of the latest period, which is a significant improvement from the previous year's leverage. The equity ratio stands at 64.4%, suggesting financial stability and a healthy capital structure. This represents a solid foundation for future growth and risk mitigation.
Cash Flow
82
Very Positive
Westlake Chemical PRN's cash flow performance is impressive, with a free cash flow growth rate of 10.9% and an operating cash flow to net income ratio of 3.6 in TTM (Trailing-Twelve-Months). These metrics indicate a strong cash generation ability, supporting operational and strategic flexibility. The company's free cash flow to net income ratio of 3.3 further underscores its efficient cash flow management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.09B1.14B1.19B1.59B1.21B966.67M
Gross Profit
370.84M418.94M387.46M377.37M441.71M378.88M
EBIT
341.95M390.44M357.71M347.69M410.69M352.99M
EBITDA
400.96M507.59M472.14M470.33M519.56M456.88M
Net Income Common Stockholders
89.87M62.39M54.28M334.83M401.38M341.12M
Balance SheetCash, Cash Equivalents and Short-Term Investments
49.62M58.32M58.62M64.78M17.06M17.15M
Total Assets
1.37B1.29B1.32B1.37B1.48B1.36B
Total Debt
0.00399.67M399.67M399.67M399.67M399.67M
Net Debt
-49.62M341.36M341.06M334.89M382.62M382.52M
Total Liabilities
568.25M458.64M460.59M468.27M508.00M441.35M
Stockholders Equity
803.11M829.31M522.51M903.71M972.70M915.14M
Cash FlowFree Cash Flow
371.06M436.03M405.18M409.62M327.27M336.43M
Operating Cash Flow
426.22M485.00M452.00M463.74M408.44M373.40M
Investing Cash Flow
-65.15M-88.97M-75.94M-12.00M-64.30M2.03M
Financing Cash Flow
-367.20M-396.33M-382.23M-404.01M-344.24M-378.20M

Westlake Chemical PRN Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price22.28
Price Trends
50DMA
22.53
Negative
100DMA
22.92
Negative
200DMA
22.31
Negative
Market Momentum
MACD
-0.14
Negative
RSI
46.17
Neutral
STOCH
69.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WLKP, the sentiment is Neutral. The current price of 22.28 is below the 20-day moving average (MA) of 22.37, below the 50-day MA of 22.53, and below the 200-day MA of 22.31, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 46.17 is Neutral, neither overbought nor oversold. The STOCH value of 69.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$659.59M7.8811.26%2.62%6.03%5079.05%
72
Outperform
$785.12M14.9510.22%8.43%-6.76%-3.19%
HUHUN
54
Neutral
$1.98B-4.46%8.79%0.02%-43.65%
51
Neutral
$969.79M-8.44%8.35%4.15%57.25%
51
Neutral
$2.04B-1.15-21.37%3.64%2.88%-30.57%
LXLXU
49
Neutral
$557.77M-5.28%-4.23%-259.01%
BABAK
46
Neutral
$1.54B-8638.28%0.81%-34.74%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WLKP
Westlake Chemical PRN
22.28
1.50
7.22%
BAK
Braskem SA
3.82
-2.78
-42.12%
HUN
Huntsman
12.10
-11.29
-48.27%
LXU
Lsb Industries
7.76
-0.82
-9.56%
TROX
TRONOX
6.12
-12.33
-66.83%
ASIX
AdvanSix
24.60
0.62
2.59%

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.