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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2724
Positioning
Market Dominance
Manufacturing
Chemicals
$9.9B
Albert Y. Chao
Westlake Corporation manufactures and supplies petrochemicals, polymers, and building products. The Housing and Infrastructure Products segment manufactures and sells residential PVC siding; PVC trim and moldings; roofing applications; decorative stone; windows; PVC decking; polymer composite roof tiles; PVC pipe and fittings. The company was formerly known as Westlake Chemical Corporation.
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Dates updated upon official exchange announcement.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$WLK WESTLAKE CORP | 46 | 38 | 36 | 45 | - | - | -8.2% | -4.1% | 10.3% | -6.5% | -7.3% | -11.5% | 2.7% | 47.0x | $9.9B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
WESTLAKE CORP (WLK) receives a "Reduce" rating with a composite score of 45.5/100. It ranks #2724 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Albert Y. Chao
Chief Executive Officer
Labor Force
15,900
38
33
57
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for WLK
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for WLK.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 38 | 16 | +22ALPHA |
| MOMENTUM | 45 | 29 | +16ALPHA |
| VALUATION | 36 | 15 | +21ALPHA |
| INVESTMENT | 33 | 50 | -17DRAG |
| STABILITY | 57 | 45 | +12ALPHA |
| SHORT INT | 48 | 46 | +2NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC -22.2% vs WACC 7.2% (spread -29.4%)
GM 10% vs sector 43%, OM -7% vs sector 1%
Capital turnover 1.04x
Rev growth -12%, 10yr history
Interest coverage -18.7x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
WESTLAKE CORP receives a Reduce rating from our analysis, with a composite score of 45.5/100 and 2 out of 5 stars, ranking #2724 out of 7,333 stocks. WLK's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
WLK's quality score of 38/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -8.2% (sector avg: -2.5%), gross margins of 10.3% (sector avg: 42.5%), net margins of -7.3% (sector avg: -0.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 36/100, WLK appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 1.22x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
WESTLAKE CORP's investment score of 33/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -11.5% vs. a sector average of 5.9% and a return on assets of -4.1% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
WLK is currently showing below-average momentum at 45/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -11.5% year-over-year, while a beta of 1.24 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
With a stability score of 57/100, WLK exhibits average financial resilience. Key stability metrics include a beta of 1.24 and a debt-to-equity ratio of 47.00x (sector avg: 0.2x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
The short interest score of 48/100 for WLK suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include above-average market sensitivity (beta: 1.24), elevated leverage (D/E: 47.00x). With a $9.9B market cap (mid-cap), WESTLAKE CORP may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
WLK pays a solid dividend yield of 2.7%, contributing an income component to total returns. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
WESTLAKE CORP is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #2724 of 7,333 overall (63rd percentile). Key comparisons include ROE of -8.2% trailing the -2.5% sector median and operating margins of -6.5% below the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While WLK currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (33) would have the largest impact on the composite score.
ROE 232% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 76% BELOW SECTOR MEDIAN
Op. Margin 604% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate WESTLAKE CORP (WLK) as a Reduce with a composite score of 45.5/100 at a current price of $104.14. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (57th percentile) and momentum (45th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (33th percentile) and value (36th percentile) tempers our overall conviction. We assign a No Moat rating (22/100), High uncertainty, and Poor capital allocation.
Key items to watch: the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
WESTLAKE CORP holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.5/100 places it at rank #2724 in our full 7,333-stock universe. At $9.9B in market capitalization, WESTLAKE CORP is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -12% combined with momentum at the 45th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 10% (-32.2pp vs sector) narrow to operating margins of -7% (-7.8pp vs sector) and net margins of -7.3%, yielding a gross-to-net conversion rate of -70%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $104.14, WESTLAKE CORP is trading at a premium to fundamental value. Our value factor score of 36/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.
The stock currently trades at P/B of 1.2x, P/S of 1.0x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
A 2.73% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
The Reduce rating (composite 45.5/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -12% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Thin net margins of -7.3% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a High uncertainty rating to WESTLAKE CORP. Key risk factors include current negative profitability (net margin -7.3%). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: current negative profitability (net margin -7.3%). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 57th percentile and quality factor at the 38th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: a 2.73% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate WESTLAKE CORP's capital allocation as Poor. Key concerns include low returns on equity (-8.2%), negative profitability, weak asset returns (ROA -4.1%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — WESTLAKE CORP significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, WESTLAKE CORP receives a Reduce rating with a composite score of 45.5/100 (rank #2724 of 7,333). Our quantitative framework assigns a No Moat (22/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 42/100.
Our analysis does not support a constructive view on WESTLAKE CORP at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign WESTLAKE CORP a meaningful economic moat, scoring 22/100 on our composite assessment. The ROIC-WACC spread of -29.4% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, financial resilience, reached only 9.5/20.
The strongest moat sources are financial resilience (9.5/20) and margin superiority (5.2/20). Interest coverage -18.7x. GM 10% vs sector 43%, OM -7% vs sector 1%. These pillars form the core of WESTLAKE CORP's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (1.4/20) and reinvestment efficiency (2.2/20). ROIC -22.2% vs WACC 7.2% (spread -29.4%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect WESTLAKE CORP's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include declining revenues (-12%) that pressure the earnings outlook. The margin cascade from 10% gross to -7% operating to -7.3% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 38th percentile.
The margin profile shows gross margins of 10%, operating margins of -7%, net margins of -7.3%. Return metrics include ROE of -8.2% and ROA of -4.1%. Relative to the Manufacturing sector, gross margins are 32.2 percentage points below the sector median of 43%, and ROE of -8.2% compares to a sector median of -2.5%.
The balance sheet reflects moderate leverage with D/E of 47%, a dividend yield of 2.73%, revenue growth of -12%. The sector median D/E is 0%, putting WESTLAKE CORP at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
Westlake Chemical Partners reported Q2 2025 earnings that missed analyst expectations, with flat net income, reduced revenue, and lower operating cash flows due to a major maintenance turnaround at its ethylene production facility.
Westlake Chemical (WLK) reported Q2 2024 revenue of $3.21 billion, down 1.4% year-over-year, and EPS of $2.40, up from $2.31 in the prior-year quarter. The company's performance was mixed compared to analyst estimates, with revenue beating expectations but EPS surpassing the consensus estimate.