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Westlake Chemical PRN
(NYSE:WLKP)
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Rating:75Outperform
Price Target:
$24.00
▲(8.94% Upside)
Action:Reiterated
Date:08/04/26
The score is driven primarily by strong profitability and cash flow generation, reinforced by a constructive earnings call highlighting stable operations and improved financing terms. Valuation is supportive due to a low P/E and high yield, while the biggest near-term offset is weak technical momentum (negative MACD and price below key moving averages) and the thin distribution coverage buffer.
Positive Factors
Strong cash generation
Sustained TTM OCF (~$466M) and FCF (~$422M) provide durable internal funding for distributions, maintenance capex, and debt service. High cash conversion supports the MLP payout model, enables deleveraging or opportunistic growth, and cushions the partnership through cyclical industry troughs.
Negative Factors
Thin distribution coverage
A quarterly coverage ratio at 1.0x and TTM at 1.04x leave minimal buffer between DCF and payout. Structurally thin coverage limits the partnership's ability to absorb lower volumes, pricing shocks, or capex increases without cutting distributions or relying on sponsor/market funding, elevating payout risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained TTM OCF (~$466M) and FCF (~$422M) provide durable internal funding for distributions, maintenance capex, and debt service. High cash conversion supports the MLP payout model, enables deleveraging or opportunistic growth, and cushions the partnership through cyclical industry troughs.
Read all positive factors
Westlake Chemical PRN (WLKP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$764.13M
Dividend Yield8.74%
Average Volume (3M)25.84K
Price to Earnings (P/E)13.2
Beta (1Y)0.16
Revenue Growth13.40%
EPS Growth10.28%
CountryUS
Employees2,169
SectorBasic Materials
Sector Strength58
IndustryChemicals
Share Statistics
EPS (TTM)1.63
Shares Outstanding35,245,880
10 Day Avg. Volume32,035
30 Day Avg. Volume25,839
Financial Highlights & Ratios
PEG Ratio-0.62
Price to Book (P/B)1.34
Price to Sales (P/S)0.57
P/FCF Ratio3.32
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.88
Revenue Forecast (FY)$1.37B
Westlake Chemical PRN Business Overview & Revenue Model
Company Description
Westlake Chemical Partners LP concentrates on acquiring, developing, and operating facilities dedicated to ethylene production, along with related infrastructure, throughout the United States. These plants primarily function by converting ethane i...
How the Company Makes Money
WLKP makes money primarily by earning revenue from (1) the sale of ethylene produced at its owned ethylene facility and (2) fees/tariffs from transportation and related midstream services on associated pipeline assets. The partnership’s revenue mo...
Westlake Chemical PRN Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a largely positive picture of financial and operational stability: steady net income, a meaningful increase in distributable cash flow (+$3M, ~+20% YoY), conservative leverage (~1x), healthy cash balances, extended and improved financing arrangements, and a fixed-margin ethylene agreement that insulates most margins. Key risks noted were thin distribution coverage (quarterly coverage 1.0x; trailing 12-month 1.04x), flat earnings growth, exposure to market volatility from geopolitical events, and reliance on parent support. Overall, the positive items—stability of cash flows, DCF improvement, distribution track record, and stronger financing terms—outweigh the limited operational and market risks.Positive Updates
Stable Partnership Net Income
Westlake Partners reported net income of $14 million ($0.40 per unit) for Q2 2026, essentially in line with both Q2 2025 and Q1 2026, demonstrating stability in the partnership's earnings.
Negative Updates
Flat Net Income Growth
Partnership net income remained flat year-over-year and quarter-over-quarter at $14 million, indicating limited near-term earnings growth despite stable operations.
Read all updates
Q2-2026 Updates
Positive
Negative
Stable Partnership Net Income
Westlake Partners reported net income of $14 million ($0.40 per unit) for Q2 2026, essentially in line with both Q2 2025 and Q1 2026, demonstrating stability in the partnership's earnings.
Read all positive updates
Company Guidance
On guidance, management said for modeling purposes there are no planned turnarounds in 2026 and reiterated that the partnership can sustain the current distribution without accessing the capital markets; key metrics cited include a Q2 2026 distribution of $0.4714 per unit (payable Aug 28, record Aug 13), 48 consecutive quarterly distributions since the July 2014 IPO (distributions up 71% from the original $0.275 minimum), Q2 Westlake Partners net income of $14 million ($0.40/unit) and consolidated net income of $82 million on consolidated net sales of $297 million, distributable cash flow of $18 million ($0.50/unit, +$3M YoY), a quarterly coverage ratio of 1.0x and trailing 12‑month coverage of 1.04x (improved from 1.0x), consolidated cash/investments of $93 million, long‑term debt of $400 million (partnership $377M, OpCo $23M), OpCo Q2 capex of $12 million, consolidated leverage ~1.0x, a fixed ethylene margin of $0.10 per pound on 95% of production, and recently extended revolvers through 2031 with a 10‑basis‑point interest reduction; management said it will evaluate growth via four levers (higher OpCo ownership, acquisitions, organic expansions and negotiating a higher fixed margin).Westlake Chemical PRN Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.23B | 1.17B | 1.14B | 1.19B | 1.59B | 1.21B |
| Gross Profit | 384.80M | 347.85M | 418.94M | 387.46M | 377.37M | 441.71M |
| EBITDA | 480.87M | 450.00M | 507.59M | 472.14M | 470.33M | 519.56M |
| Net Income | 57.60M | 48.70M | 62.39M | 54.28M | 64.17M | 82.55M |
Balance Sheet | ||||||
| Total Assets | 1.22B | 1.26B | 1.29B | 1.32B | 1.37B | 1.48B |
| Cash, Cash Equivalents and Short-Term Investments | 49.32M | 44.27M | 58.32M | 58.62M | 64.78M | 17.06M |
| Total Debt | 399.67M | 399.67M | 399.67M | 399.67M | 399.67M | 399.67M |
| Total Liabilities | 447.94M | 454.18M | 458.64M | 460.59M | 468.27M | 508.00M |
| Stockholders Equity | 253.71M | 501.11M | 518.70M | 522.51M | 534.50M | 536.55M |
Cash Flow | ||||||
| Free Cash Flow | 409.14M | 201.65M | 436.03M | 405.18M | 409.62M | 327.27M |
| Operating Cash Flow | 465.66M | 280.47M | 485.00M | 452.00M | 463.74M | 408.44M |
| Investing Cash Flow | -56.52M | 31.18M | -88.97M | -75.94M | -12.00M | -64.30M |
| Financing Cash Flow | -396.40M | -325.70M | -396.33M | -382.23M | -404.01M | -344.24M |
Westlake Chemical PRN Technical Analysis
Neutral
22.03
Price Trends
22.33
Negative
22.29
Negative
20.84
Positive
Market Momentum
-0.22
Negative
41.06
Neutral
55.75
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 22.03 is above the 20-day moving average (MA) of 21.75, below the 50-day MA of 22.33, and above the 200-day MA of 20.84, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 41.06 is Neutral, neither overbought nor oversold. The STOCH value of 55.75 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 2 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $764.13M | 13.23 | 13.12% | 8.56% | 13.40% | 10.28% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $726.45M | 20.22 | 6.98% | ― | 22.12% | ― | |
52 Neutral | $593.24M | -4.19 | -52.28% | ― | -3.56% | 68.49% | |
49 Neutral | $993.33M | -1.85 | -51.44% | 3.21% | 3.53% | -118.53% | |
49 Neutral | $439.04M | -25.36 | -2.20% | 3.04% | 2.96% | -122.83% | |
42 Neutral | $798.73M | -0.69 | 142.56% | ― | -13.10% | -0.68% |
* Basic Materials Sector Average
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Westlake Chemical PRN Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Westlake Chemical Partners Extends Credit Facilities, Maintains Distributions
Positive
Aug 4, 2026
Westlake Chemical Partners LP reported net income attributable to the Partnership of $14.2 million, or $0.40 per limited partner unit, for the second quarter of 2026, slightly below the $14.6 million earned a year earlier. However, cash flows from...
Business Operations and StrategyDividendsFinancial Disclosures
Westlake Chemical PRN Boosts Distribution After Strong Quarter
Positive
May 5, 2026
Westlake Chemical Partners LP reported that in the first quarter of 2026 it generated net income attributable to the Partnership of $14.2 million, or $0.40 per unit, sharply higher than the $4.9 million earned a year earlier, as higher production ...
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.