Westlake Chemical (WLK) PT Lowered to $108 at RBC Capital Following 2Q Miss

RBC Capital lowered its price target on Westlake Chemical (NYSE: WLK) to $108.00 (from $126.00) while maintaining a Sector Perform rating following the company's 2Q earnings report. Westlake reported Q2/18 EPS of $2.12, well below the Street’s $2.50. EBITDA was below expectations at $568M, ~6% below the $605M RBC Capital was modeling. Overall, segment results contributed ~$0.32 of EPS downside while below the line items contributed another ~$0.04 of EPS downside.

WLK does not provide numerical guidance, but indicated strong global demand for Olefins and Vinyls persists while WLK assets continue to run well. Despite a more conservative view, RBC Capital believes PE markets could eventually tighten back up 2019 if strong demand persists and absorbs all of the new supply.

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