Wells Fargo downgrades Westlake, slashes 2025 profit estimate to zero on weaker PE, PVC outlook

NEW YORK (ICIS)–Wells Fargo has downgraded US-based Westlake to ‘equal weight’ from ‘overweight’ on a weaker outlook for polyethylene (PE) and polyvinyl chloride (PVC).

“We believe industry operating rates in North America for PE and PVC started Q2 2025 on a weaker note (low 80s) due to tariff uncertainty, making it difficult for Westlake to post quarter-on-quarter EBITDA (earnings before interest, tax, depreciation and amortization) growth in Q2 2025,” said analyst Michael Sison in a research note.

“As a result, PVC and PE pricing fell in April versus March, with potential for further declines in May,” he added.

The analyst slashed his 2025 earnings per share (EPS) estimate on Westlake to zero from a prior $2.60, and his 2026 forecast to $2.60 from a prior $4.90.

For the upcoming Q2, he now sees a loss of $0.33 per share versus prior expectations of a profit of $0.95 per share.

“We expect PVC prices will not see the usual seasonal acceleration during construction season given weakness in the housing market, though we anticipate a normal seasonal decline later this year,” said Sison.

Shares of Westlake fell $3.22, or 4.1%, to $76.20 at the close of trading on 20 May 2025, hitting a new 52-week low.

(Thumbnail shows pipe made out of PVC. Image by Shutterstock.)