Westlake Chemical (WLK) Stock Forecast & Price Target

Westlake Corporation is positioned for growth, with significant year-over-year volume increases in its Housing and Infrastructure Products (HIP) and Performance and Essential Materials (PEM) segments, projecting a 6% and 8% rise respectively. The company's strong performance in the HIP segment, which has benefited from infrastructure spending, aligns with a positive outlook for sales in the coming years, guided to range between $4.4 to $4.6 billion with improving EBITDA margins. Furthermore, anticipated recovery in PVC pricing and overall construction activity should bolster Westlake's financials, contributing to expected growth rates of 5% in 2026 and 4% in 2027, alongside strengthening free cash flow.

Westlake Corp is experiencing downward pressure on its financial performance, primarily driven by weak market conditions across its chlorovinyls segment and slower demand post-COVID in Asia, which is compounded by consumer pressures in North America. The company's EBITDA estimates for Q1 and FY25 have been revised downward, reflecting an anticipated decline in margins from a previous 24.3% to a target range of 20-22%. Additionally, average prices within the Performance and Essential Materials segment have fallen significantly, with year-over-year reductions of 2% and sequential declines of 7% in the fourth quarter, indicating ongoing challenges amid a weak construction environment exacerbated by higher raw material costs and interest rates.