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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on WLK

Westlake Corporation's recent performance was negatively impacted by weak global demand, lower prices, and a significant Q3 loss. The company's net sales declined to $2.838 billion, and it reported a loss from operations of $766 million. A quarterly loss of $0.29 per share was reported, missing the Zacks Consensus Estimate of $0.18. Weakness in the current business condition drove the negative performance. Additionally, Westlake's debt management strategy included a cash tender offer for its 3.600% Senior Notes due 2026.

1.c. Company Highlights

2. Westlake's Q3 2025 Earnings: A Deeper Dive into the Numbers and Outlook

Westlake reported a loss of $38 million or $0.29 per share in Q3 2025, missing the estimated EPS of $0.18. Revenue came in at $2.8 billion, with EBITDA of $313 million, down from the previous quarter due to lower sales volume in the Housing and Infrastructure Products (HIP) segment and lower average selling price in the Performance and Essential Materials (PEM) segment. The company's actual EPS is a significant departure from the expected $0.18, highlighting the challenges in the current market.

Publication Date: Nov -05

📋 Highlights
  • Q3 2025 EBITDA & Sales:: EBITDA $313M on $2.8B net sales, down sequentially due to HIP and PEM segment volume/price pressures.
  • PEM Goodwill Impairment:: $727M noncash charge for chlorovinyl business, driven by macroeconomic and supply-demand imbalances.
  • 2026 Cost Targets:: $200M structural cost reductions, 75% from PEM, via plant reliability, footprint optimization, and cost cuts.
  • HIP Segment Resilience:: 6% sequential sales drop but 0.5% YoY volume gain, with EBITDA margin at 20% (22% excluding one-offs).
  • 2025 Guidance Revised:: Revenue $4.2–4.4B and EBITDA margin 20–22%, now leaning toward lower end due to construction slowdown and costs.

Segmental Performance

The HIP segment's sales fell by 6% sequentially, driven by lower sales volume in pipe and fittings and global compounds, while the segment's EBITDA margin declined to 20%. On the other hand, the PEM segment's sales fell by $46 million sequentially due to a 4% decline in average sales price, but sales volume increased by 1% sequentially, resulting in a $38 million increase in EBITDA. As Jean-Marc Gilson noted, the company remains positive on the outlook for chlorovinyls, despite the noncash impairment charge of $727 million.

Guidance and Outlook

Westlake provided guidance for 2025, with revenue expected to be in the range of $4.2 billion to $4.4 billion and EBITDA margin between 20% to 22%. However, due to lower North American residential construction activity and period-related costs, the company now expects to be towards the lower end of these ranges. For 2026, the company is expecting to see an increase in EBITDA due to cost savings, asset optimization, and the acquisition of ACI, with analysts estimating revenue growth at 2.7%.

Valuation

With a P/E Ratio of -8.95, P/B Ratio of 0.91, and EV/EBITDA of 16.77, the market is pricing in significant challenges for Westlake. The company's ROE and ROIC are also negative, at -9.42% and -5.22% respectively. However, the Dividend Yield is a relatively healthy 3.15%, providing some support to the stock. As the company navigates the current market challenges, its diversified portfolio and vertically integrated business model are likely to be key factors in its ability to weather the storm.

3. NewsRoom

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Creative Planning Grows Stake in Westlake Corporation $WLK

Dec -02

Source: defenseworld.net

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Westlake Announces Achievement of 2030 Emissions Target in 2024 Sustainability Report

Nov -24

Source: businesswire.com

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Westlake Sees Unusually Large Options Volume (NYSE:WLK)

Nov -19

Source: defenseworld.net

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Westlake Corporation Declares Quarterly Dividend

Nov -14

Source: businesswire.com

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Westlake Corporation Announces Results of Cash Tender Offer for Its 3.600% Senior Notes Due 2026

Nov -11

Source: businesswire.com

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Westlake Corporation Announces Pricing of Cash Tender Offer for Its 3.600% Senior Notes Due 2026

Nov -10

Source: businesswire.com

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Westlake Polyethylene Achieves ISCC PLUS Certification at Sulphur, Louisiana Site

Nov -06

Source: businesswire.com

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Westlake Announces Pricing of $1.2 Billion Offering of Senior Notes

Nov -04

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.84%)

6. Segments

Performance and Essential Materials

Expected Growth: 4.5%

Westlake Corporation's Performance and Essential Materials segments drove 4.5% growth, fueled by increasing demand for polyethylene and polyvinyl chloride (PVC) in construction and packaging, as well as higher sales volumes and prices in the chlor-alkali business, supported by a strong global economy and infrastructure development.

Housing and Infrastructure Products

Expected Growth: 5.5%

Westlake Corporation's Housing and Infrastructure Products segment growth of 5.5% is driven by increasing demand for polyvinyl chloride (PVC) pipes and fittings, growth in residential construction, and infrastructure development projects. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to the segment's growth.

7. Detailed Products

Petrochemicals

Westlake Corporation produces a range of petrochemicals, including ethylene, propylene, and butadiene, which are used as building blocks for various downstream products.

Vinyls

Westlake Corporation manufactures a variety of vinyl products, including PVC resin, vinyl chloride monomer, and vinyl compounds.

Olefins

Westlake Corporation produces olefins, including ethylene and propylene, which are used as feedstocks for the production of various chemicals and plastics.

Polyethylene

Westlake Corporation manufactures a range of polyethylene resins, including HDPE, LDPE, and LLDPE, which are used in various applications.

Polypropylene

Westlake Corporation produces polypropylene resins, which are used in various applications, including packaging, automotive, and construction.

Chlor-Alkali

Westlake Corporation produces chlorine, caustic soda, and other chlor-alkali products, which are used in various industries.

8. Westlake Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Westlake Corporation's threat of substitutes is moderate due to the availability of alternative energy sources and the increasing adoption of electric vehicles.

Bargaining Power Of Customers

Westlake Corporation's customers have limited bargaining power due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

Westlake Corporation's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants in the energy industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry in the energy industry is high due to the presence of several established players and the ongoing competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 32.39%
Debt Cost 4.51%
Equity Weight 67.61%
Equity Cost 10.42%
WACC 8.51%
Leverage 47.91%

11. Quality Control: Westlake Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Element Solutions

A-Score: 5.0/10

Value: 3.5

Growth: 6.3

Quality: 6.2

Yield: 2.0

Momentum: 5.0

Volatility: 6.7

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Balchem

A-Score: 4.7/10

Value: 1.9

Growth: 5.6

Quality: 7.5

Yield: 1.0

Momentum: 2.5

Volatility: 9.7

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H.B. Fuller

A-Score: 4.3/10

Value: 5.0

Growth: 4.8

Quality: 4.1

Yield: 3.0

Momentum: 2.0

Volatility: 7.0

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Westlake

A-Score: 4.0/10

Value: 7.8

Growth: 4.0

Quality: 3.5

Yield: 4.0

Momentum: 0.0

Volatility: 5.0

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Minerals Technologies

A-Score: 4.0/10

Value: 6.6

Growth: 4.3

Quality: 3.2

Yield: 1.0

Momentum: 2.0

Volatility: 7.0

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Olin

A-Score: 3.7/10

Value: 5.5

Growth: 4.4

Quality: 2.0

Yield: 6.0

Momentum: 0.5

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

68.02$

Current Price

68.02$

Potential

-0.00%

Expected Cash-Flows