Westlake (WLK) is best positioned among its peers amid weakness in the commodity chemicals sector due to clear visibility into earnings growth in 2026-2027 from cost reductions, greater exposure to construction recovery, and low leverage, RBC Capital Markets said in a note Friday.

Analysts said their discussions with investor relations teams suggest demand remained weak through Q4, with companies like Dow (DOW), LyondellBasell Industries (LYB), Olin (OLN), and Eastman Chemical (EMN) guiding to weaker-than-expected Q4 results.

"We expect only modest improvement in 2026. Most commodity chem are still facing macro weakness, but we expect improvement baked into most company guides," analysts said in the note.

Westlake stands out due to "aggressive footprint rationalization" and cost-saving initiatives that are expected to fully benefit earnings in 2026, analysts said, adding that the company plans to shut several North American facilities, while continuing to supply customers from its seven other North American chlorovinyl facilities.

These closures are expected to improve annual EBITDA by about $100 million and reduce capital spending by $75 million, delivering roughly $175 million in free cash flow benefits in 2026 with a payback period of less than one year.

RBC Capital raised its price target on Westlake to $100 from $85, and kept its outperform rating.

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