Westlake Chemical CorporationNYSE
Westlake Chemical: Bullish Picture Remains Intact
Tide Is Going Out, But Westlake Is Wearing Shorts
Darspal S Mann • 14 Comments
Darspal S Mann • 14 Comments
Fri, Oct. 14, 2:52 PM
- LyondellBasell (LYB +0.3%) is initiated with a Buy rating and a $95 price target at Tudor Pickering, which considers it a compelling value play in the chemicals sector with peer-leading holder capital returns, balance sheet security and appealing growth projects.
- LYB’s appealing propylene oxide exposure, unique yield flexibility and higher margin polyolefin products should provide some earnings insulation, the firm says.
- Tudor also initiates Westlake Chemical (WLK -1.2%) and Westlake Chemical Partners (WLKP -0.3%) with Hold ratings and respective $53 and $23 price targets; the firm says WLK has “mouth watering" growth outlook although it is not a bargain, while IRS rules for MLPs pose a risk for WLKP.
Fri, Sep. 30, 1:55 PM
- Westlake Chemical (WLK +1.7%) is reinstated with a Neutral rating and a $51 price target at Goldman Sachs, which says the acquisition of PVC producer Axiall makes strategic sense for WLK by shifting exposure to a potential chlor-alkali up-cycle from declining U.S. ethylene margins.
- WLK can offset the ethylene downcycle through earnings growth from a potential up-cycle in chlor-alkali combined with ~$100M in deal-related cost synergies and an ongoing cost cutting program at AXLL, Goldman says.
- However, the firm is not convinced that near-term chlor-alkali industry operating rates - currently below 80% globally - are strong enough yet to support sustained profitability improvement, which is several years away.
Wed, Aug. 24, 3:23 PM
- The Texas Railroad Commission, which has the power to set pipeline rates, rules that Westlake Chemical (WLK -2.3%) cannot charge a market-driven rate for use of its Texas pipeline, ending a three-year dispute that has been closely watched by pipeline, chemical and oil industry leaders, FuelFix.com reports.
- Eastman Chemical (EMN +0.6%) filed a complaint with the commission after WLK nearly doubled its rate in 2013 to $3.50 per 100 lbs. from $1.90, and the commission today set a rate of $2.45 per 100 lbs.
- The dispute centers on the cost of shipping ethylene 200 miles through WLK’s pipeline from Longview, Tex., to Mont Belvieu, near the Houston Ship Channel.
Tue, Aug. 23, 11:39 AM
- Westlake Chemical (WLK +3.1%) is upgraded to Outperform from Sector Perform with a $59 price target, raised from $47, at RBC, which expects the stock will continue to march higher ahead of the pending $2.4B acquisition of vinyl maker Axiall.
- RBC believes the AXLL deal creates a new way to play chlor-alkali and that management will take full advantage of synergies the deal presents.
- The firm also notes WLK's financial prudence and strong balance sheet, and that while rising polyethylene prices are a near-term positive for the company, WLK is "the way to play" for investors who anticipate lower-for-longer ethane prices.
Fri, Aug. 19, 6:52 AM
Thu, Jul. 28, 4:38 PM
Wed, Jul. 27, 5:35 PM
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Mon, Jul. 18, 11:25 AM
- Westlake Chemical (WLK -1.1%) says it is restarting its Calvert City, Ky., petrochemical complex after an unexpected shutdown on June 1 caused by a mechanical failure of its ethylene unit which resulted in a complete outage of the complex.
- WLK says the shutdown will hit Q2 and Q3 earnings by ~$40M, and will report the financial loss through a force majeure declaration.
- WLK plans to expand the plant by adding 70M lbs./year of capacity to produce ethylene; the project is expected to be completed by mid-2017.
Fri, Jun. 10, 9:44 AM
- Westlake Chemical (WLK +2.3%) agrees to acquire Axiall (AXLL +25.7%) for $33/share, a 28% premium to yesterday's closing price, representing an enterprise value of ~$3.8B including debt.
- The combined company will be the third-largest chlor-alkali producer and the second-largest PVC producer in North America, with expected combined pro forma revenues of $7.6B and EBITDA of $1.5B for the 12 months ended Q1 2016.
- WLK expects the transaction to be accretive to its earnings in the first year following the close and expects ~$100M in annualized cost synergies.
- AXLL had rejected two earlier offers from WLK, including a sweetened bid in early April of $23.35/share in cash and stock, and South Korea’s Lotte Chemical said earlier this week that it had made a bid.
Tue, Jun. 7, 7:59 AM
- Axiall (NYSE:AXLL) +6.2% premarket after South Korea's Lotte Chemical says it has submitted a takeover bid for the U.S. chemicals company; the terms of the bid are not known.
- The move sets up Lotte as a potential white knight for AXLL, which is trying to fight off a takeover attempt by Westlake Chemical (NYSE:WLK); AXLL this year has rejected two unsolicited bids from WLK, which has launched a proxy fight and is urging approval of its slate of candidates to replace AXLL's board at the June 17 annual shareholder meeting.
- Lotte formed a venture with AXLL last year to build a plant for making ethylene in the U.S. with production to start in 2018.
Mon, May 23, 12:59 PM
- Axiall (AXLL +2.9%) is higher after expressing an openness to consider a revised takeover offer from Westlake Chemical (WLK -0.1%).
- WLK says it will either submit a new offer or reaffirm its previous $1.6B bid at $23.35/share after AXLL CFO Gregory Thompson asked for the company to submit a new offer by June 3, in advance of AXLL’s June 17 shareholders meeting.
- WLK says it will continue to proceed with its current proxy contest to replace AXLL's board.
- Now read Westlake will work for longs
Tue, May 10, 5:37 PM
Tue, May 3, 6:36 AM
- Westlake Chemical (NYSE:WLK): Q1 EPS of $0.94 beats by $0.01.
- Revenue of $975.2M (-11.3% Y/Y) misses by $44.8M.
Mon, May 2, 5:30 PM
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Mon, Apr. 25, 3:48 PM
- Westlake Chemical (WLK -1.8%) nominates nine candidates to replace Axiall's (AXLL -1.4%) board, saying the current board’s rejection of its improved takeover offer three weeks ago is not in the best interests of shareholders.
- WLK says AXLL's "track record of value destruction and underperformance, repeated failed attempts to deliver on expectations, and in-process initiatives" are unlikely to generate value creation "anywhere near" that of its proposal.
- WLK also says AXLL has not yet set a date for its annual meeting and tha the company may seek to delay the meeting and an opportunity for AXLL shareholders to voice their concerns in a formal manner.
- Now read Axiall investors need to consider Westlake Chemical's interest
Fri, Apr. 22, 5:39 PM