Westlake Chemical (WLK) AI Stock Analysis

• Market Cap: $11.08B
• Dividend Yield: 2.41%
• Average Volume (3M): 873.78K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 1.04
• Revenue Growth: -3.24%
• EPS Growth: 24.29%
• Country: US
• Employees: 15,540
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 4.63
• Shares Outstanding: 128,489,000
• 10 Day Avg. Volume: 871,654
• 30 Day Avg. Volume: 873,784
• PEG Ratio: 0.76
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.07
• Price to Cash Flow (P/CF): 7.50
• P/FCF Ratio: 7.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $130.43
• Price Target Upside: 56.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

Westlake Chemical's overall score is driven by mixed financial performance and technical analysis indicators. Strengths include a solid balance sheet and strong earnings in the HIP segment. However, high valuation, declining revenue, and cash flow issues weigh down the score. The positive earnings call, highlighting cost savings and shareholder returns, provides some balance but is not enough to outweigh the valuation concerns.

Positive Factors

Growth Potential

The ability to post solid growth despite a difficult housing market demonstrates the strength and growing penetration with distributors/builders on a national level.

Management and Strategy

WLK is a U.S.-focused chlor-alkali, PVC, building products, and PE producer with top-notch management and an impeccable balance sheet.

Market Performance

WLK's diversified portfolio continues to perform relatively well vs. its commodity peers.

Negative Factors

Earnings and Profitability

Earnings per share estimates for future years have been revised downward.

Financial Performance

EBITDA forecasts have been reduced for the upcoming years, indicating lower expected profitability.

Market Outlook

Reasonable question marks remain with regard to the housing markets as well as the commodity chemical/PEM markets.

Westlake Chemical Business Overview & Revenue Model

Company Description

Westlake Corporation manufactures and supplies petrochemicals, polymers, and building products worldwide. It operates through two segments, Performance and Essential Materials; and Housing and Infrastructure Products. The Performance and Essential Materials segment manufactures and markets polyethylene, styrene monomer, ethylene co-products, PVC, VCM, ethylene dichloride chlor-alkali, and chlorinated derivative products. The Housing and Infrastructure Products segment manufactures and sells residential PVC siding; PVC trim and moldings; roofing applications; decorative stone; windows; PVC decking; PVC films for various inflatables, wallcovering, tape, and roofing applications; polymer composite roof tiles; PVC pipe and fittings; PVC compounds; and various consumer and commercial products such as landscape edging; industrial, home and office matting; marine dock edging; and masonry joint controls. The company offers its products to a range of customers, including chemical processors, plastics fabricators, small construction contractors, municipalities, and supply warehouses for use in various consumer and industrial markets, including residential construction, flexible and rigid packaging, automotive products, healthcare products, water treatment, and coatings, as well as other durable and non-durable goods. The company was formerly known as Westlake Chemical Corporation and changed its name to Westlake Corporation in February 2022. The company was founded in 1986 and is headquartered in Houston, Texas. Westlake Corporation is a subsidiary of TTWF LP.

How the Company Makes Money

Westlake Chemical makes money through the production and sale of its petrochemical, polymer, and building products. The company generates revenue primarily from its Olefins and Vinyls segments. In the Olefins segment, revenue is derived from the sale of products like polyethylene and styrene, which are used in various consumer goods and industrial applications. In the Vinyls segment, the company earns income from products such as PVC and other vinyl resins, which are integral to the construction and infrastructure sectors. Westlake Chemical's vertically integrated operations allow it to optimize production costs and maintain competitive pricing, further enhancing profitability. Additionally, strategic acquisitions and partnerships contribute to revenue growth and market expansion, enabling the company to strengthen its position in the global market.

Westlake Chemical Financial Statement Overview

Summary

Westlake Chemical's financial performance is mixed. The balance sheet is strong with a low debt-to-equity ratio and substantial equity, but the income statement reveals declining revenue and margin pressures. The significant drop in free cash flow highlights potential cash management issues.

Income Statement

Westlake Chemical has shown a fluctuating revenue trajectory with a recent decline from $12.548 billion in 2023 to $12.142 billion in 2024. The gross profit margin in 2024 stands at 16.11%, with a net profit margin of 4.96%. Notably, there was a significant dip in EBIT and EBITDA margins, reflecting increased operational challenges. However, the company demonstrated resilience in maintaining profitability amidst a challenging environment.

Balance Sheet

The balance sheet reveals a solid equity base with stockholders' equity at $10.527 billion in 2024, translating to an equity ratio of 50.73%. The debt-to-equity ratio is low at 0.068, indicating conservative leverage use. The company has considerable cash reserves, enhancing financial stability and providing flexibility for future investments.

Cash Flow

Free cash flow has decreased significantly from $1.302 billion in 2023 to $306 million in 2024, representing a substantial contraction in liquidity. The operating cash flow to net income ratio is strong at 2.18, highlighting effective cash generation relative to net income. However, the decline in free cash flow growth underscores potential cash management pressures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.14B	12.55B	15.79B	11.78B	7.50B
	Gross Profit
1.96B	2.22B	4.07B	3.50B	1.02B
	EBIT
875.00M	729.00M	3.05B	2.80B	429.00M
	EBITDA
2.21B	1.96B	4.18B	3.69B	1.25B
	Net Income Common Stockholders
602.00M	479.00M	2.25B	2.02B	330.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.92B	3.30B	2.23B	1.91B	1.31B
	Total Assets
20.75B	21.04B	20.55B	18.46B	13.84B
	Total Debt
719.00M	5.52B	4.88B	5.18B	3.57B
	Net Debt
-2.20B	2.21B	2.65B	3.27B	2.25B
	Total Liabilities
9.71B	10.27B	10.09B	9.93B	7.26B
	Stockholders Equity
10.53B	10.24B	9.93B	7.96B	6.04B
Cash Flow		Free Cash Flow
306.00M	1.30B	2.29B	1.74B	772.00M
	Operating Cash Flow
1.31B	2.34B	3.40B	2.39B	1.30B
	Investing Cash Flow
-1.00B	-1.04B	-2.48B	-3.21B	-509.00M
	Financing Cash Flow
-650.00M	-245.00M	-587.00M	1.44B	-216.00M

Westlake Chemical Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 83.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 83.08 is below the 20-day moving average (MA) of 99.93, below the 50-day MA of 106.90, and below the 200-day MA of 127.11, indicating a bearish trend. The MACD of -2.88 indicates Positive momentum. The RSI at 36.71 is Neutral, neither overbought nor oversold. The STOCH value of 26.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WLK.

Westlake Chemical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMN	75 Outperform	$8.72B	9.84	16.11%	4.45%	1.91%	2.94%
RPM	72 Outperform	$13.72B	21.07	25.54%	1.82%	0.12%	24.30%
AVNT	68 Neutral	$2.79B	16.52	7.32%	3.53%	3.11%	123.46%
WLK	59 Neutral	$11.08B	18.58	5.76%	2.41%	-3.24%	24.29%
LYB	59 Neutral	$18.31B	13.63	10.69%	9.47%	-1.46%	-36.00%
SQM	48 Neutral	$10.11B	―	-7.56%	3.93%	-39.35%	-120.09%
Sector *	47 Neutral	$2.32B	-2.83	-21.67%	3.65%	4.83%	-28.82%

Westlake Chemical Corporate Events

Westlake Chemical Awards CEO $1M in RSUs

On February 28, 2025, Westlake Corporation’s Compensation Committee approved a special award of restricted stock units (RSUs) to Jean-Marc Gilson, the company’s President and CEO, valued at $1,000,000 under their 2013 Omnibus Incentive Plan. The RSUs will fully vest on February 28, 2028, contingent upon Mr. Gilson’s continuous full-time employment with the company, reflecting a strategic move to retain key leadership.

Westlake Chemical Reports Record 2024 Financial Results

Westlake Corporation announced its financial results for the fourth quarter and full year of 2024, reporting record income from operations of $807 million and EBITDA of $1.1 billion in its Housing and Infrastructure Products segment. This marks the fifth consecutive quarter of year-over-year growth in sales volume, underscoring the company’s robust market positioning and operational resilience.