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Westlake Corporation
(NYSE:WLK)
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Rating:53Neutral
Price Target:
$79.00
▲(5.61% Upside)
Action:Reiterated
Date:08/07/26
WLK scores in the low-to-mid range primarily due to weak recent financial performance (profitability collapse and negative free cash flow despite positive operating cash flow). The score is partially supported by a constructive earnings call with a clear improvement narrative and reiterated profitability initiatives, plus a reasonable dividend yield. Technicals remain mixed-to-soft, limiting upside conviction.
Positive Factors
Feedstock / PEM Advantage
Westlake’s PEM business benefits from a structurally advantaged North American feedstock and energy position. Lower ethane and gas costs and demonstrated pricing leverage produce durable margin upside when commodity spreads normalize, giving the company a sustainable cost competitiveness versus import-dependent peers and underpinning earnings recovery over months.
Negative Factors
Profitability Deterioration
The company has swung from prior multi-year profitability to deeply compressed margins and negative returns, reflecting cyclical commodity pricing and cost pressure. Persistently weak margins undermine ROE, reduce retained earnings for capex or acquisitions, and mean recovery depends on durable commodity spread and sustained operational improvements.
Read all positive and negative factors
Positive Factors
Negative Factors
Feedstock / PEM Advantage
Westlake’s PEM business benefits from a structurally advantaged North American feedstock and energy position. Lower ethane and gas costs and demonstrated pricing leverage produce durable margin upside when commodity spreads normalize, giving the company a sustainable cost competitiveness versus import-dependent peers and underpinning earnings recovery over months.
Read all positive factors
Westlake Corporation (WLK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.56B
Dividend Yield2.85%
Average Volume (3M)1.07M
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-3.95%
EPS Growth-1725.20%
CountryUS
Employees14,600
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-9.62
Shares Outstanding127,796,550
10 Day Avg. Volume774,901
30 Day Avg. Volume1,069,564
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.08
Price to Sales (P/S)0.85
P/FCF Ratio-17.98
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 Target
$96.00Price Target Upside28.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)3.09
Revenue Forecast (FY)$11.70B
Westlake Corporation Business Overview & Revenue Model
Company Description
Westlake Corporation operates as a global producer and supplier of petrochemicals, polymers, and a diverse range of building materials. Its business activities are structured into two main divisions: Performance and Essential Materials, and Housin...
How the Company Makes Money
Westlake makes money primarily by manufacturing and selling chemicals and downstream building products. Its major revenue streams come from: (1) Petrochemicals—selling olefins and polyolefins (notably ethylene and polyethylene) to packaging, consu...
Westlake Corporation 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 emphasized meaningful operational and financial improvement driven by PEM's advantaged feedstock position, substantial contributions from the 3-pillar profitability program, strong HIP volume growth (notably in Pipe & Fittings), debt reduction and strategic acquisitions. Offsetting items include remaining reliability issues and margin pressure in HIP from lower average selling prices and higher logistics/raw material costs, plus some near-term market volatility and pull-forward demand risk. On balance, management presented sustainable cost savings, improving operations and a constructive outlook for pricing in key products, while acknowledging and addressing remaining operational and macro uncertainties.Positive Updates
Strong Overall Results
Net sales of $3.3 billion and adjusted EBITDA of $679 million in Q2 2026; net income of $260 million ($2.01 per share) vs. a net loss of $12 million in Q2 2025.
Negative Updates
Plant Reliability and Unplanned Outages
Management acknowledged residual unplanned outages in Q2 that prevented reliability from reaching targets; corrective actions completed by end of Q2 but reliability remains an ongoing focus to sustain improved monthly/quarterly runs.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Overall Results
Net sales of $3.3 billion and adjusted EBITDA of $679 million in Q2 2026; net income of $260 million ($2.01 per share) vs. a net loss of $12 million in Q2 2025.
Read all positive updates
Company Guidance
The company guided that HIP revenue for 2026 should land toward the lower end of its prior $4.4–$4.6 billion range with an EBITDA margin of about 19%–21% (excluding identified items); total company capital expenditures are still expected to be $900 million for 2026 and cash interest about $215 million; management reiterated the $600 million EBITDA target from its 3‑pillar profitability program for 2026 and expects H2 cash flow to benefit from a significant working‑capital release (especially in Q4). Management also said PEM pricing will remain sensitive to global oil moves (with polyethylene and PVC expected to be higher year‑over‑year by year‑end), caustic should average higher in H2 while chlorine is roughly flat, and the company will balance debt reduction and opportunistic buybacks — its Q2 liquidity and actions included $1.9 billion of cash and investments, $5.1 billion of total debt (weighted‑average maturity >17 years, average coupon ~4%), retirement of $500 million of 2026 notes, $30 million of share repurchases in Q2 and roughly $100 million returned to shareholders YTD, with Q2 net cash provided by operations of $318 million.Westlake Corporation Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
52
Neutral
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.29B | 11.17B | 12.14B | 12.55B | 15.79B | 11.78B |
| Gross Profit | 533.00M | 289.00M | 1.96B | 2.22B | 4.07B | 3.50B |
| EBITDA | -40.00M | -199.00M | 2.21B | 1.96B | 4.18B | 3.69B |
| Net Income | -1.24B | -1.51B | 602.00M | 479.00M | 2.25B | 2.02B |
Balance Sheet | ||||||
| Total Assets | 19.44B | 19.96B | 20.75B | 21.04B | 20.55B | 18.46B |
| Cash, Cash Equivalents and Short-Term Investments | 1.85B | 2.93B | 2.92B | 3.30B | 2.23B | 1.91B |
| Total Debt | 5.75B | 6.41B | 5.28B | 5.52B | 5.50B | 5.64B |
| Total Liabilities | 10.23B | 10.67B | 9.71B | 10.27B | 10.09B | 9.93B |
| Stockholders Equity | 8.71B | 8.79B | 10.53B | 10.24B | 9.93B | 7.96B |
Cash Flow | ||||||
| Free Cash Flow | -265.00M | -530.00M | 306.00M | 1.30B | 2.29B | 1.74B |
| Operating Cash Flow | 631.00M | 465.00M | 1.31B | 2.34B | 3.40B | 2.39B |
| Investing Cash Flow | -1.09B | -1.22B | -1.00B | -1.04B | -2.48B | -3.21B |
| Financing Cash Flow | 23.00M | 530.00M | -650.00M | -245.00M | -587.00M | 1.44B |
Westlake Corporation Technical Analysis
Negative
74.80
Price Trends
76.06
Negative
87.84
Negative
86.50
Negative
Market Momentum
-0.08
Positive
43.07
Neutral
6.58
Positive
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 74.8 is below the 20-day moving average (MA) of 76.72, below the 50-day MA of 76.06, and below the 200-day MA of 86.50, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 43.07 is Neutral, neither overbought nor oversold. The STOCH value of 6.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WLK.
Westlake Corporation Risk Analysis
Westlake Corporation disclosed 34 risk factors in its most recent earnings report. Westlake Corporation reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Westlake Corporation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $21.55B | 16.15 | 23.63% | 1.48% | 58.56% | 189.59% | |
70 Outperform | $8.24B | 18.84 | 7.42% | 4.91% | -4.30% | -46.24% | |
64 Neutral | $9.75B | -17.29 | -10.34% | ― | -1.57% | -183.83% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $15.72B | 280.23 | 2.26% | 1.41% | 18.32% | ― | |
61 Neutral | $20.21B | -55.91 | -3.36% | 6.83% | -11.13% | -245.92% | |
53 Neutral | $9.56B | -7.76 | -13.93% | 2.87% | -3.95% | -1725.20% |
* Basic Materials Sector Average
WLK
Westlake Corporation
74.61
-9.20
-10.98%
ALB
Albemarle
134.51
48.00
55.49%
EMN
Eastman Chemical
72.93
7.37
11.24%
LYB
LyondellBasell
62.62
9.68
18.28%
SQM
Sociedad Quimica Y Minera SA
78.28
31.68
67.99%
AVTR
Avantor
14.50
1.31
9.93%
Westlake Corporation Corporate Events
Business Operations and StrategyFinancial Disclosures
Westlake Corporation Posts Strong Q2 2026 Turnaround
Positive
Aug 4, 2026
In the second quarter of 2026, Westlake reported net sales of $3.3 billion, net income of $260 million, or $2.01 per share, and EBITDA of $679 million, marking a significant turnaround from losses in both the prior quarter and the same period in 2...
Legal Proceedings
Westlake’s European Ethylene Lawsuits Partially Dismissed in Court
Positive
Jul 29, 2026
On July 29, 2026, the District Court of Amsterdam dismissed two major components of the Ethylene Antitrust Litigation brought against Westlake and other ethylene consumers, rejecting claims by Shell Chemical Europe B.V., which sought about €...
Business Operations and StrategyM&A Transactions
Westlake Expands European Chlorovinyls Footprint with German Acquisition
Positive
Jun 15, 2026
On June 15, 2026, Westlake Corporation announced that its German subsidiary, Westlake Vinnolit GmbH Co. KG, completed the acquisition of a polyvinyl chloride and vinyl chloride monomer production site in Wilhelmshaven, Germany, which had been in ...
Executive/Board ChangesShareholder Meetings
Westlake Shareholders Endorse Board, Pay and Auditor
Positive
May 18, 2026
At its annual meeting of stockholders held on May 14, 2026, Westlake Corporation’s shareholders elected five members to the Board of Directors, confirming the company’s existing governance structure and leadership continuity. The vote ...
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.