Title

Earning Preview: Westlake Chemical this quarter’s revenue is expected to decrease by 11.39%, and institutional views are bullish

Abstract

Westlake Chemical will release its quarterly results on February 24, 2026, Pre-Market, and this preview distills the latest financial run-rate, current-quarter projections, business mix dynamics, and prevailing institutional views.

Market Forecast

Based on the latest compiled projections, Westlake Chemical’s current-quarter revenue is estimated at 2.61 billion, implying a year-over-year decline of 11.39%. The forecast calls for EPS of -1.43, down an estimated 230.40% year over year, and EBIT of -197.43 million, down an estimated 198.83% year over year; a specific company outlook for gross margin or net margin in the current quarter is not available from the dataset, though the negative EBIT/EPS trajectory implies margin pressure against the prior-year period. Within the business mix, Performance and Essential Materials and Housing and Infrastructure Products remain the principal revenue anchors and are expected to set the tone through pricing, volumes, and operating cost execution. The most promising near-term segment appears to be Housing and Infrastructure Products, which generated 1.09 billion last quarter; management execution on pricing discipline, order conversion into spring, and mix upgrades will be important markers of potential acceleration.

Last Quarter Review

Westlake Chemical’s last quarter delivered revenue of 2.84 billion (down 8.95% year over year), a gross profit margin of 8.32%, GAAP net profit attributable to the parent company of -0.78 billion, a net profit margin of -27.55%, and adjusted EPS of -0.29 (down 120.57% year over year). A key financial highlight was the sharp quarter-on-quarter change in net profit, which declined by 450.70%, underscoring sequential deterioration amid pricing and cost headwinds that compressed profitability. In the business mix, Performance and Essential Materials contributed 1.75 billion and Housing and Infrastructure Products contributed 1.09 billion, together representing the full revenue base and illustrating the significant exposure to the vinyls chain and downstream building products.

Current Quarter Outlook

Performance and Essential Materials

The Performance and Essential Materials segment is the core upstream engine of Westlake Chemical’s integrated chain, and recent quarterly patterns indicate that earnings sensitivity is most acute here when product spreads narrow. In the current quarter, the forecast for negative EBIT and EPS suggests that pricing across key chain products and cost inputs together remain adverse compared with the prior-year quarter. Investors will likely parse any commentary around realized pricing for resins and chlor-alkali products against feedstock and energy costs, since even modest changes in feedstock or power can move gross margin given the volume base and operating leverage. Operational execution is a second focal point for this segment. Stable operating rates and disciplined cost control historically help protect cash margins through the trough, while any unplanned downtime can quickly magnify margin compression when spreads are already thin. With last quarter’s gross margin at 8.32% and a negative net margin, the bar for improvement is anchored to achieving better netbacks and sustaining high utilization without incremental cost inflation. The projected revenue decline of 11.39% year over year for the current quarter frames the challenge: this segment’s contribution must offset pricing weakness through mix, cost, or both to stabilize earnings power. Pricing announcements and transactional momentum during January and February are another area to watch. While broad-based list price initiatives can set a directional tone, realized net pricing depends on contracts, index lags, and export versus domestic mix. If realized prices firm and feedstock costs do not rise proportionally, incremental margin repair can occur intra-quarter. Conversely, if energy or feedstock costs tick higher without commensurate pricing traction, the negative operating leverage implicit in current forecasts may persist through quarter-end.

Housing and Infrastructure Products

Housing and Infrastructure Products, at 1.09 billion last quarter, is the downstream stabilizer that can differentiate Westlake Chemical’s earnings trajectory when residential repair, remodel, and infrastructure activity improve into the spring transition. The current quarter’s setup favors close attention to order patterns, customer inventory positioning, and pricing discipline on building products where mix upgrades—such as higher-value profiles and accessories—can improve unit economics. If retailer and distributor orders normalize as seasonal categories build, there is potential for sequential improvement even as year-over-year comparisons remain difficult. The segment’s integration into Westlake Chemical’s upstream inputs can mitigate volatility. Internal sourcing of critical materials helps moderate cost spikes and can support steadier margins than would be available to non-integrated peers. If raw materials and logistics costs remain contained, the segment’s pricing initiatives can translate more directly into margin expansion, providing a counterweight to upstream pressure. The timing of channel reorder cycles will be important: earlier spring builds support better throughput, while delays can defer recovery into the following quarter. Execution on cost programs also matters. Downstream manufacturing footprints benefit from continuous improvement, SKU rationalization, and procurement synergies tied to the broader enterprise. Where efficiencies have been captured, the margin drop-through from incremental revenue tends to be favorable. In practical terms, investors should monitor commentary around production scheduling, backlog conversion, and sell-through rates in categories most exposed to seasonal demand, as those datapoints can foreshadow how much of the revenue base can translate to better gross margin in the near term.

Key Stock Price Drivers This Quarter

The principal stock-price levers this quarter are likely to be realized prices across the vinyls chain versus raw material and energy costs, the cadence of downstream orders into spring, and evidence of cost savings progressing through the P&L. Because the current-quarter model embeds a 11.39% revenue decline year over year and negative EBIT/EPS, any positive surprise on pricing or cost capture could produce an outsized impact on earnings revisions and, in turn, on the share price. Conversely, a shortfall in price realization or unexpected cost inflation could reinforce the negative operating leverage implicit in the forecasts. Cash flow and capital allocation commentary will also be watched. With last quarter’s net margin at -27.55% and EPS at -0.29, investors will be attuned to how working capital, capex pacing, and balance sheet flexibility are managed to maintain resilience through the trough. Any update on capital returns alongside visibility on internal investments that enhance integration, efficiency, or product mix can influence perception of medium-term earnings power. Finally, the narrative around quarter-to-date demand trends and post-quarter pricing developments can shape expectations beyond the print. Because the forecast EPS of -1.43 implies a steep year-over-year decline of 230.40%, management’s qualitative color on order intake, channel inventory health, and price negotiations can be as impactful as the reported numbers. Clear evidence that price/mix is stabilizing, costs are contained, and orders are recovering would support a better trajectory into the next quarter and could improve the stock’s near-term setup.

Analyst Opinions

Majority view: bullish, representing 6 out of 6 collected opinions over the period, with the remainder bearish at 0 out of 6. Several well-followed institutions have reiterated constructive stances and updated price targets within the last six months, focusing on the path to earnings repair and the benefits of cost and integration initiatives. RBC highlighted the potential for upside despite chemical demand softness, pointing to visible earnings improvement into 2026–2027 supported by cost reductions and portfolio exposure that favors normalization; the firm recently maintained a positive stance and raised its price target to 85.00. BofA Securities maintained a Buy rating while trimming its price target to 82.00, signaling that while near-term estimates face pressure, the firm remains positive on the company’s ability to navigate the current reset and compound earnings as spreads and volumes normalize. Alembic Global repeated a Buy rating with a 100.00 price target, underscoring confidence in the company’s through-cycle earnings power and the value of integration. Truist maintained a Buy rating with a 90.00 price target, framing the next phase as an execution story where internal cost programs, mix management, and downstream stability can improve the outlook as the year progresses. Citi reiterated a Buy rating with a 93.00 price target, emphasizing constructive risk-reward into an eventual recovery in pricing and demand. The common thread across these bullish assessments is that the current-quarter downturn is seen as cyclical and already embedded in expectations, as reflected by the current-quarter forecasts of revenue at 2.61 billion (-11.39% year over year), EBIT at -197.43 million (-198.83% year over year), and EPS at -1.43 (-230.40% year over year). Analysts argue that internally controlled levers—cost savings, operational efficiency, and integrated sourcing—can begin to counterbalance weaker product spreads and muted volumes. They also see downstream performance as an early indicator of stabilization: if Housing and Infrastructure Products shows steady order intake and disciplined pricing, it can help offset upstream volatility and build confidence in a sequential improvement path. For the quarter at hand, the bullish camp will be looking for any incremental positive color on pricing realization, raw-material costs, and downstream demand to validate a turn in margins from last quarter’s 8.32% gross margin and -27.55% net margin. They will also scrutinize the bridge from last quarter’s EPS of -0.29 to the current forecast of -1.43, assessing how much of the expected decline is tied to transitory items versus core operations. A modest upside surprise on price/mix or a tighter cost profile would support the constructive stance by signaling that the trough earnings power is stabilizing sooner than feared. In sum, the dominant institutional view remains that Westlake Chemical’s negative near-term trajectory is recognized, yet the levers for improvement—tight cost execution, integration benefits across the chain, and steady downstream performance—are intact. Any progress reported on February 24, 2026, Pre-Market that demonstrates better price capture, firm cost control, or healthier order trends would strengthen the bullish case and could set up the company for a more favorable earnings cadence in subsequent quarters.