WLK changes
Pick any two versions below to diff them.
- Price
- $63.33 → $68.28(+7.8%)
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices Westlake for weak chemical prices and slow homebuilding. PEM had operating losses in Q2 2025 and in Q1 2026. Prices rose in Q2 2026 after the conflict with Iran disrupted supply through the Strait of Hormuz, and PEM EBITDA reached $416 million. But on September 29, 2026, Westlake said that North American PVC and polyethylene prices in Q3 were lower than in Q2, that higher diesel costs and lower housing volumes hurt HIP, and that Q3 results would be lower than Q2. Chemical production in Europe faces weak demand, high energy costs and imports from Asia, and Westlake will close its Cologne PVC plant in Q1 2027. For the gap to close, three things must be true. The three-pillar profitability improvement plan must deliver its $600 million operating income benefit. PEM must stay profitable when the price spike of Q2 2026 fades, with help from low-cost North American feedstock and energy. HIP must keep its pipe and fittings growth from infrastructure work while housing is slow. The Q3 2026 report, removed: estimated for about added: on November 4, 2026, shows how far earnings fell. The 2027 results show whether the plan holds through a full year. Because chemical cycles are long, the gap will probably close only over several years. The main reason it may not close is a long period of global oversupply in PVC and polyethylene.
- Checkpoints
- Nov 4, removed: 2026 (estimate): added: 2026: Q3 2026 earnings: how far earnings fell. Pending. Watch: PEM EBITDA that stays positive and well above the levels of 2025 passes; a return to PEM losses fails. Q1 2027 (estimate): Cologne PVC plant closes. Pending. Watch: The plant closes in Q1 2027 within the expected charges of about $205 million passes; higher costs or a delay fail.