Westlake Chemical (WLK) Stock Forecast & Price Target

Westlake Corp's financial outlook remains positive due to a modest increase in US housing starts, which rose by 0.7% year-over-year, providing a supportive backdrop for the company's Housing and Infrastructure Products segment. The company's strong positioning in pipes and fittings, bolstered by infrastructure spending, coupled with its ability to engage in value-accretive M&A strategies, positions Westlake favorably within its market. Moreover, the projected rise in PVC prices amidst elevated industry inventory levels suggests potential for revenue growth, which, along with a significant cash balance, provides flexibility for further expansion and enhanced shareholder returns.

Westlake Corp's financial outlook appears negative due to declining US contract prices for polyvinyl chloride, which fell by a total of 3 cents per pound in the third quarter, contributing to a significant decrease in EBITDA margins to 19.7%, down 4.2% year-over-year. Additionally, the persistent weakness in the housing market, with US housing starts declining by 7% year-on-year in August, exacerbates challenges within its Housing and Infrastructure Products segment amidst flat volume performance influenced by low affordability. Furthermore, lowered 2025 and 2026 EBITDA estimates, revised down to $1,337 million and $1,817 million respectively, indicate overall diminished earnings expectations across Westlake's segments, particularly in Performance and Essential Materials.