olivLaw · US equity research
Westlake Corporation WLK
Industrial Organic Chemicals · SIC 2860 · Vertical: Industrial Organic Chemicals (SIC 2860)
Westlake Corporation is a vertically integrated global manufacturer of housing and infrastructure products and of performance and essential materials, running from ethylene and chlor-alkali through to PVC, polyethylene and epoxy. In the second quarter of 2026 the company reported net sales of $3,271 million and EBITDA of $679 million, as the PEM segment recovered, which makes the company relevant to the current cycle in petrochemicals.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Westlake Corporation (WLK) stock was 67.90 USD (−0.83% on the day), with market capitalisation 8.7 bn USD, dividend yield 3.13%, beta 0.91, 52-week range 56.38–123.39 USD. Latest reported quarter (Q3 2026): revenue of 3.0 bn USD (+5.0% YoY), net income of 6.0 m USD, diluted EPS 0.05 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 55.6
- strong (55–70)
- Bollinger (20, 2)
- 59.15 – 69.97
- in the upper half of the band · %B 0.81 · band width 16.8%
- SMA 50 / 200
- 67.52 / 86.68
- mixed trend
- MACD (12, 26, 9)
- 0.53 / -0.38
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +5.1% | −1.1% | +6.2 pp | — |
| 3 months | −13.8% | −0.5% | −13.3 pp | — |
| 6 months | −32.0% | +4.4% | −36.4 pp | — |
| Year to date | −8.2% | +12.3% | −20.5 pp | — |
| 1 year | +1.7% | +13.5% | −11.9 pp | −5.5% |
| 3 years | −45.1% | +76.4% | −121.5 pp | −26.4% |
| 5 years | −31.5% | +63.7% | −95.2 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 2.8 bn | 2.8 bn | 3.0 bn | 2.8 bn | 2.5 bn | 2.7 bn | 3.3 bn | 3.0 bn |
| Cost of revenue | 2.5 bn | 2.6 bn | 2.7 bn | 2.6 bn | 2.4 bn | 2.5 bn | 2.6 bn | 2.6 bn |
| Gross profit | 328.0 m | 232.0 m | 258.0 m | 236.0 m | 87.0 m | 112.0 m | 652.0 m | 382.0 m |
| SG&A | 226.0 m | 227.0 m | 221.0 m | 228.0 m | 224.0 m | 236.0 m | 253.0 m | 250.0 m |
| Operating income | 66.0 m | -32.0 m | -109.0 m | -766.0 m | -671.0 m | -172.0 m | 364.0 m | 43.0 m |
| Depreciation & amortisation | 281.0 m | 283.0 m | 295.0 m | 303.0 m | 297.0 m | 284.0 m | 286.0 m | 290.0 m |
| Interest expense | 39.0 m | 39.0 m | 40.0 m | 41.0 m | 51.0 m | 56.0 m | 55.0 m | 52.0 m |
| Pre-tax income | 96.0 m | -34.0 m | -125.0 m | -775.0 m | -663.0 m | -190.0 m | 338.0 m | 8.0 m |
| Income tax | 77.0 m | 1.0 m | 6.0 m | -3.0 m | -130.0 m | -33.0 m | 67.0 m | -10.0 m |
| Net income | 7.0 m | -40.0 m | -142.0 m | -782.0 m | -544.0 m | -169.0 m | 260.0 m | 6.0 m |
| Diluted EPS | 0.05 ≈ | -0.31 | -1.11 | -6.06 | -4.24 ≈ | -1.31 | 2.01 | 0.05 |
| Operating cash flow | 434.0 m | -77.0 m | 135.0 m ≈ | 182.0 m ≈ | 225.0 m | -94.0 m | 318.0 m ≈ | 395.0 m ≈ |
| Capex | 285.0 m | 248.0 m | 267.0 m ≈ | 239.0 m ≈ | 241.0 m | 209.0 m | 207.0 m ≈ | 175.0 m ≈ |
| Dividends paid | 67.0 m | 68.0 m | 68.0 m ≈ | 68.0 m ≈ | 68.0 m | 68.0 m | 69.0 m ≈ | 68.0 m ≈ |
| Share repurchases | 60.0 m | 30.0 m | 0 ≈ | 0 ≈ | 33.0 m | 0 | 30.0 m ≈ | 0 ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 8.6 bn | 8.1 bn | 7.5 bn | 11.8 bn | 15.8 bn | 12.5 bn | 12.1 bn | 11.2 bn |
| Revenue YoY | +7.4% | −6.0% | −7.6% | +57.0% | +34.1% | −20.6% | −3.2% | −8.0% |
| Net income | 996.0 m | 421.0 m | 330.0 m | 2.0 bn | 2.2 bn | 479.0 m | 602.0 m | -1.5 bn |
| Net income YoY | −23.6% | −57.7% | −21.6% | +510.6% | +11.5% | −78.7% | +25.7% | −350.5% |
| Diluted EPS | 7.62 | 3.25 | 2.56 | 15.58 | 17.34 | 3.70 | 4.64 | -11.70 |
| Diluted EPS YoY | −23.8% | −57.3% | −21.2% | +508.6% | +11.3% | −78.7% | +25.4% | −352.2% |
| net % | 11.5% | 5.2% | 4.4% | 17.1% | 14.2% | 3.8% | 5.0% | -13.5% |
| Free cash flow | 707.0 m | 514.0 m | 772.0 m | 1.7 bn | 2.3 bn | 1.3 bn | 306.0 m | -530.0 m |
Reported results vs expectations
Loading…
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 2.7 bn USD
- Financial debt
- 5.6 bn USD
- Net debt
- 2.9 bn USD
- Equity
- 9.3 bn USD
- Total assets
- 20.0 bn USD
- Debt / equity
- 0.60x
- Current ratio
- 2.24x
- ROE
- -14.8%
- ROA
- -7.4%
- FCF margin
- -4.7%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 7.5 bn | 11.8 bn | 15.8 bn | 12.5 bn | 12.1 bn | 11.2 bn | SEC (XBRL)· 26 Feb 2026verified |
| Cost of revenue | 6.5 bn | 8.3 bn | 11.7 bn | 10.3 bn | 10.2 bn | 10.4 bn | SEC (XBRL)· 26 Feb 2026verified |
| Gross profit | 1.0 bn | 3.5 bn | 4.1 bn | 2.2 bn | 2.0 bn | 813.0 m | SEC (XBRL)· 26 Feb 2026verified |
| SG&A | 449.0 m | 551.0 m | 835.0 m | 865.0 m | 874.0 m | 900.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Operating income | 429.0 m | 2.8 bn | 3.1 bn | 729.0 m | 875.0 m | -1.6 bn | SEC (XBRL)· 26 Feb 2026verified |
| Depreciation & amortisation | 773.0 m | 840.0 m | 1.1 bn | 1.1 bn | 1.1 bn | 1.2 bn | SEC (XBRL)· 26 Feb 2026verified |
| EBITDA | 1.2 bn ≈ | 3.6 bn ≈ | 4.1 bn ≈ | 1.8 bn ≈ | 2.0 bn ≈ | -400.0 m ≈ | SEC (XBRL)· 26 Feb 2026derived |
| Interest expense | 142.0 m | 176.0 m | 177.0 m | 165.0 m | 159.0 m | 171.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Pre-tax income | 331.0 m | 2.7 bn | 2.9 bn | 700.0 m | 938.0 m | -1.6 bn | SEC (XBRL)· 26 Feb 2026verified |
| Income tax | -42.0 m | 607.0 m | 649.0 m | 178.0 m | 291.0 m | -126.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Net income | 330.0 m | 2.0 bn | 2.2 bn | 479.0 m | 602.0 m | -1.5 bn | SEC (XBRL)· 26 Feb 2026verified |
| Diluted EPS | 2.56 | 15.58 | 17.34 | 3.70 | 4.64 | -11.70 | SEC (XBRL)· 26 Feb 2026verified |
| Weighted average diluted shares | 128.1 m | 128.7 m | 128.8 m | 128.6 m | 129.2 m | 128.3 m | SEC (XBRL)· 26 Feb 2026verified |
| Dividend per share | 1.07 | 1.14 | 1.31 | 1.71 | 2.05 | 2.11 | SEC (XBRL)· 26 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 1.3 bn | 1.9 bn | 2.2 bn | 3.3 bn | 2.9 bn | 2.7 bn | SEC (XBRL)· 26 Feb 2026verified |
| Receivables | 1.1 bn | 1.7 bn | 1.7 bn | 1.4 bn | 1.3 bn | 1.2 bn | SEC (XBRL)· 26 Feb 2026verified |
| Inventories | 918.0 m | 1.4 bn | 1.9 bn | 1.6 bn | 1.7 bn | 1.7 bn | SEC (XBRL)· 26 Feb 2026verified |
| Current assets | 3.5 bn | 5.3 bn | 6.0 bn | 6.6 bn | 6.2 bn | 6.2 bn | SEC (XBRL)· 26 Feb 2026verified |
| Property, plant & equipment, net | 6.9 bn | 7.6 bn | 8.5 bn | 8.5 bn | 8.6 bn | 8.6 bn | SEC (XBRL)· 26 Feb 2026verified |
| Goodwill | 1.1 bn | 2.0 bn | 2.2 bn | 2.0 bn | 2.0 bn | 1.3 bn | SEC (XBRL)· 26 Feb 2026verified |
| Intangibles (excl. goodwill) | 444.0 m | 1.1 bn | 993.0 m | 910.0 m | 820.0 m | 743.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Total assets | 13.8 bn | 18.5 bn | 20.6 bn | 21.0 bn | 20.8 bn | 20.0 bn | SEC (XBRL)· 26 Feb 2026verified |
| Accounts payable | 536.0 m | 879.0 m | 889.0 m | 877.0 m | 851.0 m | 783.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Short-term debt | 0 | 269.0 m | 0 | 299.0 m | 6.0 m | 497.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Long-term debt | 3.6 bn | 4.9 bn | 4.9 bn | 4.6 bn | 4.6 bn | 5.1 bn | SEC (XBRL)· 26 Feb 2026verified |
| Current liabilities | 1.4 bn | 2.3 bn | 2.3 bn | 2.8 bn | 2.2 bn | 2.8 bn | SEC (XBRL)· 26 Feb 2026verified |
| Total liabilities | 7.3 bn | 9.9 bn | 10.1 bn | 10.3 bn | 9.7 bn | 10.7 bn | SEC (XBRL)· 26 Feb 2026verified |
| Equity | 6.6 bn | 8.5 bn | 10.5 bn | 10.8 bn | 11.0 bn | 9.3 bn | SEC (XBRL)· 26 Feb 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 1.3 bn | 2.4 bn | 3.4 bn | 2.3 bn | 1.3 bn | 465.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Capex | 525.0 m | 658.0 m | 1.1 bn | 1.0 bn | 1.0 bn | 995.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Free cash flow | 772.0 m ≈ | 1.7 bn ≈ | 2.3 bn ≈ | 1.3 bn ≈ | 306.0 m ≈ | -530.0 m ≈ | SEC (XBRL)· 26 Feb 2026derived |
| Investing cash flow | -509.0 m | -3.2 bn | -2.5 bn | -1.0 bn | -1.0 bn | -1.2 bn | SEC (XBRL)· 26 Feb 2026verified |
| Financing cash flow | -216.0 m | 1.4 bn | -587.0 m | -245.0 m | -650.0 m | 530.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Dividends paid | 137.0 m | 145.0 m | 169.0 m | 221.0 m | 264.0 m | 272.0 m | SEC (XBRL)· 26 Feb 2026verified |
| Share repurchases | 54.0 m | 30.0 m | 101.0 m | 23.0 m | 60.0 m | 63.0 m | SEC (XBRL)· 26 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
Risk
Valuation
olivLaw classification
Score: 24 / 100
A scoring methodology on indicators and valuation, not investment advice.
score < 40
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 8.7 bn USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet27
- Growth0
- Quality37
- Returns33
- Valuation17
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 2.66 – 37.29 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · equity is negative: the ratio is not economically meaningful (not by itself insolvency; usually the result of buybacks)
- Peers: EV/EBITDA2.66 – 21.58 (Mid 3.07)5 companies used · median multiple 5.1x · quartiles 5.0x – 8.4xALTO, GPRE, LYB, MEOH, NEU
- Peers: P/Eunavailable · the base of the ratio is not positive
- Dividend discount (DDM)27.73 – 37.29 (Mid 31.81)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Unattractive profile · Score 24/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | -2.9% | 30 (vs peers) | 14% |
| Net margin · Quality | -3.9% | 47 (vs peers) | 8% |
| FCF conversion · Quality | unavailable | unavailable | — |
| Revenue CAGR 3Y · Growth | -10.9% | 0 (on a fixed band) | 11% |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | 4.6x | 14 (vs peers) | 14% |
| Interest coverage · Balance sheet | -2.0x | 0 (on a fixed band) | 8% |
| Current ratio · Balance sheet | 2.4x | 100 (on a fixed band) | 6% |
| P/E (TTM) · Valuation | unavailable | unavailable | — |
| EV/EBITDA · Valuation | 16.6x | 29 (vs peers) | 14% |
| FCF yield · Valuation | 0.1% | 2 (on a fixed band) | 11% |
| Shareholder yield (distributions) · Returns | 3.9% | 55 (on a fixed band) | 8% |
| Payout ratio (FCF) · Returns | 2,275.0% | 0 (on a fixed band) | 6% |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet27/100 · 3/3 factors with a value
- Growth· partial0/100 · 1/2 factors with a value
- Quality37/100 · 2/3 factors with a value
- Returns33/100 · 2/2 factors with a value
- Valuation17/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
Westlake Corporation (WLK). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 11.2 bn USD in 2025; YoY growth -8.0%; net margin -3.9%; ROE -4.9%; net debt/EBITDA 4.6x.
The estimated value range is 15.19–29.43 USD per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 17.44 USD, the price of 67.90 USD leaves a potential of -74.3% (value / price − 1) and a margin of safety of -289.3% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 24/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: growth. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Current ratio: 2.4x
What contradicts it
- ROIC: -2.9%
- Revenue CAGR 3Y: -10.9%
- Net debt / EBITDA: 4.6x
- Interest coverage: -2.0x
- EV/EBITDA: 16.6x
- FCF yield: 0.1%
- Payout ratio (FCF): 2,275.0%
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): FCF conversion, EPS CAGR 3Y, P/E (TTM).
Versus the vertical median
Industrial Organic Chemicals (SIC 2860) · same industry (4-digit SIC) · compared with 20 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| IFFInternational Flavors & Fragrances Inc | 22.0 bn | 122.1 | 1.3% | 1.6% | −5.2% | +26% / +16% |
| LYBLyondellbasell Industries N.V. | 20.4 bn | 15.6 | 11.9% | 4.1% | −9.7% | +29% / −34% |
| WLKWestlake Corporation | 8.7 bn | — | -4.9% | -3.9% | −8.0% | +2% / −45% |
| NEUNewmarket Corporation | 6.7 bn | 14.7 | 25.3% | 16.5% | −2.2% | −5% / +37% |
| SXTSensient Technologies Corp | 5.4 bn | 31.7 | 13.7% | 9.7% | +3.5% | +29% / +117% |
| MEOHMethanex Corporation | 5.0 bn | 70.1 | 6.4% | 4.0% | −3.5% | +83% / +53% |
| REXRex American Resources Corporation | 1.3 bn | 10.5 | 22.5% | 20.9% | +1.2% | +20% / +62% |
| GPREGreen Plains Inc. | 957.5 m | 8.6 | 15.4% | 6.8% | −14.9% | +32% / −45% |
| WLKPWestlake Chemical Partners LP | 761.8 m | 12.9 | — | 4.8% | +2.7% | +14% / −5% |
| GEVOGevo, Inc. | 316.5 m | — | -57.0% | -119.9% | +849.3% | −40% / +13% |
| ALTOAlto Ingredients, Inc. | 271.5 m | 5.3 | 22.2% | 5.5% | −4.9% | +37% / +43% |
| FFFuturefuel Corp. | 246.5 m | — | -18.3% | -19.9% | −60.7% | +70% / −5% |
| CDXSCodexis, Inc. | 118.3 m | — | -69.4% | -39.6% | +18.6% | −38% / −54% |
| LODEComstock Inc. | 113.3 m | — | -38.2% | -3,680.5% | −48.5% | −58% / −68% |
| AMTXAemetis, Inc | 90.2 m | — | — | -27.4% | −26.2% | −28% / −72% |
| TANHTantech Holdings Ltd | 90.1 m | — | -25.7% | -80.9% | −10.7% | −76% / −100% |
| LNZALanzaTech Global, Inc. | 69.2 m | 0.4 | 146.4% | 295.7% | +12.6% | −63% / −99% |
| SAFXXcf Global, Inc. | 41.0 m | — | -246.1% | — | unavailable | −87% / unavailable |
| TOMZTomi Environmental Solutions, Inc. | 18.2 m | — | -168.8% | -49.8% | −27.2% | −6% / −26% |
| CNEYCn Energy Group. Inc. | 2.5 m | — | -11.2% | -31.3% | −30.2% | −65% / −99% |
| BAKBraskem SA | — | — | — | -14.6% | +9.7% | −61% / −86% |
1- and 3-year price returns: for WLK from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
| 3 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
| 5 years | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable | insufficient data Total return unavailable · Per year unavailable |
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results), 10-Q (04 Nov 2026).
In brief
Westlake Corporation is a vertically integrated global manufacturer of housing and infrastructure products and of performance and essential materials, running from ethylene and chlor-alkali through to PVC, polyethylene and epoxy. In the second quarter of 2026 the company reported net sales of $3,271 million and EBITDA of $679 million, as the PEM segment recovered, which makes the company relevant to the current cycle in petrochemicals.
SWOT
Strengths
- Vertical integration across the chain from ethylene and chlor-alkali to finished building products gives flexibility in managing margins 1.
- A cost advantage in North America from cheaper natural gas and power supports the competitiveness of the PEM segment 2.
- A portfolio of established brands in siding, stone, roofing and PVC pipe, with an extensive North American distribution network 1.
Weaknesses
- High exposure to commodity products sold in competitive markets where price dominates, making margins sensitive to industry cycles 1.
- Goodwill impairment and plant closure costs in 2025 affected results and showed the vulnerability of some assets in Europe and North America 1.
- A sizeable debt load could limit financial flexibility if markets weaken, although the company reduced debt in the second quarter of 2026 3.
Opportunities
- The acquisition of a PVC and VCM site in Germany could extend the European footprint and bring long-term logistical advantages 2.
- Demand for water infrastructure and PVC pipe could keep growing if public investment is sustained 3.
- If Asian feedstock supply stays constrained, North American producers could gain market share in commodity products 2.
Threats
- Global overcapacity in PVC, polyethylene, chlor-alkali and epoxy could keep pressure on prices and margins 1.
- Tariffs, antidumping duties and trade disputes could restrict access to export markets and raise costs 1.
- Volatility in energy and raw material prices, including from the Middle East conflict, could affect costs and demand 2.
Risks
- Petrochemical cyclicalityhigh
The industry is cyclical, and periods of oversupply could reduce margins or produce operating losses, according to the annual report risk factors 1.
- Price competition and importshigh
Low-priced commodity products from Asia and other countries could reduce sales and pressure margins, particularly if imports breach fair trade rules 1.
- Raw material volatilitymedium
Costs of raw materials, energy and logistics are volatile, and delays in passing costs on to customers can weigh on profitability 1.
- International exposure and tariffsmedium
Global operations face currency, trade barrier and political risks, which could reduce exports and revenues 1.
- Indebtednessmedium
The level of debt and covenants in credit agreements could limit the ability to fund investment or respond to a fall in revenue 1.
Investment thesis
What would need to be true (bull case)
- If the price recovery in PEM holds and the profitability programme meets its targets, quarterly results could stay above earlier-year levels 3.
- Vertical integration and the North American cost advantage could support steadier margins than competitors that depend on naphtha 2.
- Volume growth in pipe and fittings, linked to North American infrastructure, could offset weakness in residential construction 3.
What would break the thesis
- The PEM recovery could prove temporary if Middle East disruption eases and global overcapacity returns 2.
- If mortgage rates stay high, demand for residential construction could remain weak and affect the HIP segment 1.
- Antidumping duties and tariffs could reduce US exports of PVC and epoxy, which could limit volumes and margins 1.
What to watch
- EBITDA margin trend and average sales prices in the PEM segmentQ3 2026
- Progress of the three-pillar profitability plan and delivery of the $600 million operating income benefit2027
- US housing demand, mortgage rates and the NAHB housing starts outlook2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (04 Nov 2026 · results), 10-Q (04 Nov 2026).
The business
Westlake operates two principal segments: Housing and Infrastructure Products (HIP), covering siding, trim, stone, roofing, windows, PVC pipe and fittings and compounds, and Performance and Essential Materials (PEM), producing ethylene, PE, chlor-alkali, PVC, VCM and epoxy resins. Integration along the materials chain, from ethylene and chlor-alkali to finished products, is central to the business model 1.
The company has expanded through acquisitions including Axiall, Boral's North American building products, Hexion's epoxy business and, in January 2026, the ACI/Perplastic Group, which has manufacturing locations including Romania, per source 1. In 2025 Westlake decided to close several North American chlorovinyl units, a styrene plant and the Pernis epoxy units as part of asset optimization.
Westlake also holds an interest in Westlake Chemical Partners LP, and part of the ethylene used in PEM is supplied by OpCo on a cost-plus basis, which gives the company a cost-advantaged position 1. This integrated structure largely explains the swings in margins between quarters.
Segments
Performance and Essential Materials (PEM)
The PEM segment returned to operating profit in the second quarter of 2026, with net sales of $2,019 million and an improved margin, supported by a 14% higher average sales price year-over-year and the profitability improvement plan 3. Management links part of this to logistical disruptions in the Strait of Hormuz, per the executive commentary 3.
Market context
The North American housing market remains under pressure from affordability and inflation, but the NAHB outlook points to housing starts stabilising in the coming years, per the annual report 1. Demand for water infrastructure and PVC pipe and fittings is seen as a support over the medium and long term 2.
Petrochemical markets are cyclical and sensitive to the balance of supply and demand; the Middle East conflict that began in February 2026 created supply constraints and higher costs for naphtha-based producers in Asia, while North American producers with cheaper natural gas gained a competitive edge 2.
Trends
- Middle East disruptionmixed
The Middle East conflict has raised global petrochemical prices and created constraints for naphtha-based producers, supporting prices in Westlake's PEM segment, while also raising logistics and raw material costs for HIP 2.
- North American natural gas costtailwind
The cost advantage of North American producers using cheaper natural gas and power could support PEM margins if the cost gap persists, according to the quarterly report 2.
- Antidumping duties and tariffsheadwind
Antidumping duties imposed by the EU, the UK and Brazil on US PVC resin, and US duties on Asian epoxy resins, could restrict US exports and reduce demand, while broader tariffs add uncertainty over input costs 1.
- Infrastructure and housingmixed
US infrastructure investment, combined with a historic housing shortfall, could support the HIP segment over the long term, while mortgage affordability remains a near-term risk factor 1.
Competitive position
In HIP, Westlake competes with producers and fabricators including Associated Materials, CertainTeed, Cornerstone Building Brands, Diamond Plastics, IPEX, JM Eagle, Trex and James Hardie, and in compounds with GEON Performance Solutions and Teknor Apex 1. Competition rests on quality, innovation, service and price.
In commodity PEM products, competition is dominated by price and by low-cost imports from Asia, and can be intensified by new capacity and by customers integrating backwards 1. Westlake aims to keep cost advantages through integration and geographic positioning.
- Associated Materials LLC
Exterior building products maker and competitor in HIP siding and trim 1.
- Trex Company, Inc.TREX
Competitor in decking and outdoor products named in source 1.
- James Hardie
Maker of fibre cement exterior products and a competitor in HIP named in the annual report 1.
- JM Eagle Inc.
PVC pipe producer and direct competitor for pipe and fittings in HIP 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
Loading the links…
News & filings
In the press
- Westlake’s (WLK) Second Quarter Turned Two Straight Losses Into ProfitYahoo Finance — News · 16 Sept 2026 · EN
- Top Los Angeles diabetes doctor Shen Yang joins China’s Westlake UniversitySouth China Morning Post — China · 28 Jul 2026 · RO
- Japanese Astronomical Society ex-president Shigeru Ida joins China’s Westlake UniversitySouth China Morning Post — China · 13 Jul 2026 · RO
The latest news item in our archive is from 16 Sept 2026; the newest SEC filing is from 04 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.
SEC filings
- Quarterly report04 Nov 2026
- Current report04 Nov 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Current report29 Sept 2026Exit or disposal costs · Regulation FD disclosure
- Current report31 Aug 2026Departure or appointment of officers
- Quarterly report05 Aug 2026
- Current report04 Aug 2026Results of operations · Regulation FD disclosure · Financial statements and exhibits
- Current report29 Jul 2026Other events
- Current report15 Jun 2026Regulation FD disclosure · Financial statements and exhibits
- Current report18 May 2026Shareholder vote
- Quarterly report06 May 2026
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Westlake Corporation · 26 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Westlake Corporation · 05 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Westlake Corporation · 04 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.