GET DAILY SIGNALSWestlake Corporation (WLK) Delivers Q3 Earnings Recovery
Key Takeaways
- Westlake reported third-quarter 2026 net sales of $2.98 billion, up 5% year over year and ahead of consensus estimates.
- GAAP diluted EPS was $0.05, while adjusted EPS of $0.45 came in slightly below analyst expectations.
- Adjusted EBITDA reached $408 million, up sharply from $313 million in the prior-year quarter.
- The Performance and Essential Materials (PEM) segment swung toward recovery, while Housing and Infrastructure Products (HIP) held sales near prior-year levels.
- Management's turnaround plan has delivered roughly $500 million in EBITDA uplift through nine months and remains on track for $600 million for the full year.
Why This Quarter Matters
Westlake Corporation's (WLK) third-quarter report serves as an important checkpoint in its multi-year profitability recovery. A year ago the company recorded a steep loss tied to a goodwill impairment in its vinyls business and a prolonged industry downturn. Management has since followed a three-pillar approach focused on cost reduction, plant reliability, and manufacturing-footprint optimization. I am watching closely to see whether these steps produce lasting margin gains, especially in the PEM segment that has weighed on results. The HIP segment continues to provide more stable income despite softer North American residential construction. This quarter's numbers offer clearer insight into whether the turnaround is gaining traction.
The Quarter's Reported Numbers
Westlake Corporation reported net sales of $2,981 million for the third quarter of 2026, a rise of roughly 5% from $2,838 million a year earlier and above the consensus estimate of about $2.95 billion. Gross profit increased to $382 million from $236 million in the same period last year.
On a GAAP basis, net income attributable to Westlake was $6 million, or $0.05 per diluted share, versus a loss of $782 million, or $6.06 per share, in the third quarter of 2025. Excluding identified items, adjusted diluted EPS came in at $0.45, a solid improvement from an adjusted loss of $0.29 per share a year ago, though just below the consensus range of roughly $0.47 to $0.50. Adjusted EBITDA totaled $408 million, up from $313 million in the prior-year quarter. The PEM segment posted the clearest gains, supported by higher average selling prices and the benefits of the turnaround program. HIP sales reached about $1.1 billion, essentially flat year over year, with an EBITDA margin of 18% compared with 20% a year earlier. For the first nine months of 2026, net sales totaled $8,904 million and diluted EPS stood at $0.75.
To compare these results with peers, I ran a quick check using Tickeron’s AI Screener.
Market Reaction and Sentiment
Westlake shares traded lower after the release as investors balanced the modest adjusted EPS shortfall against the stronger top-line beat. The revenue outperformance and year-over-year profit rebound were positive, yet the slight EPS miss and a larger sequential drop in HIP sales volumes limited enthusiasm. Attention remains on whether the PEM segment can maintain its margin recovery and whether cost measures can counter ongoing inflationary pressures such as higher European energy costs and freight expenses.
Key Factors to Monitor Ahead
The main narrative for Westlake remains execution of its profitability improvement plan. Management stated the program is on track to deliver about $600 million in combined full-year earnings improvement, with roughly $500 million already realized through the first nine months of 2026.
Investors should track several items. Pricing trends in polyethylene and PVC resin will matter, given the PEM segment's sensitivity to global supply-demand balances. Footprint optimization continues, including the announced closure of a PVC resin facility in Cologne, Germany, as part of efforts to shed underperforming assets. On the HIP side, North American residential construction activity and order timing in pipe and fittings deserve attention after the notable sequential sales decline this quarter. Cost inflation in European energy, North American freight, and ethane inputs is another factor to follow. Finally, integration of the recently acquired ACI compounding business should be watched for its impact on HIP sales growth and margins.
Refining Analysis with Tickeron Tools
When reviewing sector trends and peer comparisons for names like Westlake, I often turn to Tickeron’s AI Screener. It lets me apply technical patterns, fundamentals, and AI-driven signals across thousands of stocks and ETFs in a fraction of the time it would take manually. This has helped me surface relevant data points more efficiently during earnings seasons.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Aroon Indicator for WLK shows an upward move is likely
WLK's Aroon Indicator triggered a bullish signal on November 04, 2026. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 239 similar instances where the Aroon Indicator showed a similar pattern. In 173 of the 239 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at 72%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 22, 2026. You may want to consider a long position or call options on WLK as a result. In 56 of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 72%.
The Moving Average Convergence Divergence (MACD) for WLK just turned positive on October 14, 2026. Looking at past instances where WLK's MACD turned positive, the stock continued to rise in 35 of 51 cases over the following month. The odds of a continued upward trend are 69%.
WLK moved above its 50-day moving average on October 30, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +7.82% 3-day Advance, the price is estimated to grow further. Considering data from situations where WLK advanced for three days, in 183 of 289 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
Bearish Trend Analysis
The 10-day RSI Indicator for WLK moved out of overbought territory on November 03, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 31 similar instances where the indicator moved out of overbought territory. In 21 of the 31 cases, the stock moved lower in the following days. This puts the odds of a move lower at 68%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 7 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where WLK declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 74%.
WLK broke above its upper Bollinger Band on October 30, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 21 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.005) is normal, around the industry mean (2.450). P/E Ratio (-7.155) is within average values for comparable stocks, (-17.964). Projected Growth (PEG Ratio) (0.090) is also within normal values, averaging (1.548). Dividend Yield (0.031) settles around the average of (0.040) among similar stocks. P/S Ratio (0.803) is also within normal values, averaging (48.960).
The Tickeron PE Growth Rating for this company is 33 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 59 (best 1 - 100 worst), indicating fairly steady price growth. WLK’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 94 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. WLK’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock worse than average.
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General Information
a manufacturer of petrochemicals and fabricated products
Industry ChemicalsSpecialty
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