Westlake Chemical (WLK – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Sison from Wells Fargo reiterated a Buy rating on the stock and has a $130.00 price target.
Michael Sison has given his Buy rating due to a combination of factors that highlight Westlake Chemical’s potential for growth despite current challenges. The company is experiencing positive volume growth in its Housing and Infrastructure Products (HIP) segment, which is expected to benefit from a recovery in the North American housing market. This growth is seen as a counterbalance to the current trough conditions in the Performance and Essential Materials (PEM) segment.
Additionally, Westlake Chemical’s pricing strategies for polyethylene (PE) and caustic soda are anticipated to be supported by strong demand, which could lead to increased revenues. Although the company’s earnings estimates for 2025 and 2026 have been revised downward, the long-term outlook remains constructive, with expected improvements in earnings and EBITDA margins. The valuation of Westlake Chemical’s stock is also considered attractive, with a 12-month price target set at $130, based on a mid-cycle EBITDA estimate. These factors contribute to a favorable risk/reward profile, supporting the Buy rating.
Sison covers the Basic Materials sector, focusing on stocks such as Air Products and Chemicals, Celanese, and LyondellBasell. According to TipRanks, Sison has an average return of 1.0% and a 44.83% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $135.00 price target.