Value
9.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 9.9 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
- ▸Forward P/E: 11.4x
- ▸PEG: 0.07
- ▸Attractively valued
WLKP · Why this verdict
Why Westlake Chemical Partners (WLKP) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Westlake Chemical Partners is a high-quality, cheaply valued chemicals partnership with an 8.9% dividend and exceptional cash conversion, but growth is weak, earnings are roughly in line and the price is only 4.5% below the analyst target, so the stance is to hold.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
EPS has been in line rather than beating (1 beat, 1 miss in 4 quarters, average surprise -0.3%), and the price of $21.15 is only 4.5% below the $22.10 analyst target against 5.0% downside. Last 4 quarters | EPS meets or beats the estimates at the November report in 11 days and the upside range widens beyond 10%. | →Stable |
| CounterEstimates have already been reset lower and stable $0.40-$0.41 quarters show earnings are steady, which matters more for a yield vehicle than beats. | ||
The dividend is 8.9% with a safety score of only 5.2, and the price sits below its 200-day average, although the average is still rising 2.4% per 30 days, which is a pullback in an uptrend. Momentum breakdown | The distribution is maintained and price reclaims the 200-day average. | ↑Improving |
| CounterIf the 200-day average flattens and cash flow weakens, the pullback could become a confirmed downtrend with pressure on the distribution. | ||
WLKP shows excellent ROE of 42%, cash conversion of 477% FCF to net income and a Piotroski F-Score of 8/9, marking a high-quality business. Quality breakdown | ROE stays above 30% and free cash flow keeps covering the distribution over 12 months. | →Stable |
| CounterThe business has no competitive moat, and an ROE this high on a partnership structure partly reflects leverage and a small equity base. | ||
Valuation is attractive at a forward P/E of 11.4x with a PEG of 0.07, and the Basic Materials sector is out of favor with a value score of 9.5. Valuation breakdown | A sector rotation into materials lifts the price toward the $22.10 analyst target. | →Stable |
| CounterA cheap multiple on out-of-favor cyclical earnings can stay cheap, and weak growth means the PEG is flattered by a tiny growth input. | ||
Quarterly revenue of $297.1M in June 2026 is flat versus $297.1M a year earlier, and the engine flags weak growth with a growth score of 3.5. Bear case | Revenue reaches the roughly $336M next-quarter estimate and grows at least 5% YoY. | ↓Deteriorating |
| CounterRevenue swings with commodity pricing and feedstock pass-through, so flat sales do not necessarily mean weaker distributable cash flow. | ||
EPS has been in line rather than beating (1 beat, 1 miss in 4 quarters, average surprise -0.3%), and the price of $21.15 is only 4.5% below the $22.10 analyst target against 5.0% downside.
→StableLast 4 quarters
- Expectation
- EPS meets or beats the estimates at the November report in 11 days and the upside range widens beyond 10%.
CounterEstimates have already been reset lower and stable $0.40-$0.41 quarters show earnings are steady, which matters more for a yield vehicle than beats.
The dividend is 8.9% with a safety score of only 5.2, and the price sits below its 200-day average, although the average is still rising 2.4% per 30 days, which is a pullback in an uptrend.
↑ImprovingMomentum breakdown
- Expectation
- The distribution is maintained and price reclaims the 200-day average.
CounterIf the 200-day average flattens and cash flow weakens, the pullback could become a confirmed downtrend with pressure on the distribution.
WLKP shows excellent ROE of 42%, cash conversion of 477% FCF to net income and a Piotroski F-Score of 8/9, marking a high-quality business.
→StableQuality breakdown
- Expectation
- ROE stays above 30% and free cash flow keeps covering the distribution over 12 months.
CounterThe business has no competitive moat, and an ROE this high on a partnership structure partly reflects leverage and a small equity base.
Valuation is attractive at a forward P/E of 11.4x with a PEG of 0.07, and the Basic Materials sector is out of favor with a value score of 9.5.
→StableValuation breakdown
- Expectation
- A sector rotation into materials lifts the price toward the $22.10 analyst target.
CounterA cheap multiple on out-of-favor cyclical earnings can stay cheap, and weak growth means the PEG is flattered by a tiny growth input.
Quarterly revenue of $297.1M in June 2026 is flat versus $297.1M a year earlier, and the engine flags weak growth with a growth score of 3.5.
↓DeterioratingBear case
- Expectation
- Revenue reaches the roughly $336M next-quarter estimate and grows at least 5% YoY.
CounterRevenue swings with commodity pricing and feedstock pass-through, so flat sales do not necessarily mean weaker distributable cash flow.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 2.2 |
| Op margin | 10.0 |
| Net margin | 2.3 |
| Current ratio | 9.6 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 42%
- ▸Excellent cash conversion: 477% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.5 |
| EPS growth | 4.6 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.5 |
| OBV | 10.0 |
| MA position | 5.2 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+2.3%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 23%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 8.2 |
| growth rank | 5.0 |
- ▸Superior ROE vs peers
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.9 |
| support resistance | 5.3 |
| 52w position | 8.3 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.7 |
| days to cover | 4.0 |
| volatility | 8.9 |
| put call | 9.4 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 7.9 |
- ▸High IV: 83%
Catalyst
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 5.2 |
- ▸Earnings in 5 days
- ▸Dividend: 8.9%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.9<1.5@spot
- EARNINGS_PROXIMITY:5d<=7d
Warning (2)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.91
Upside
+4.5%
Downside
5.0%
Sizing output
AVOID
SetupRange Bound — RSI 40 mid-range, Bollinger mid-band
EdgeSector Rotation — Basic Materials sector out of favor, value=9.5
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.2>=4.5. Top dim: Value at 9.5; weakest: Growth at 3.5. No conviction either direction.
The strongest dimensions are Value at 9.5, Quality at 7.6, and Risk (lower is worse) at 7.1; the weakest are Growth at 3.5, Catalyst at 4.2, and Insider at 5.0. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.91 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Cash Generator
Trip ifROE falls below 25% from the current 42%.
- P2Attractive Valuation
Trip ifForward P/E rises above 15x from the current 11.4x.
- P3Weak Growth Flat Revenue
Trip ifQuarterly revenue falls below $260M, more than 12% under the current $297.1M.
- P4In Line Earnings Thin Upside
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Distribution And Pullback Risk
Trip ifPrice falls below $20.55, the stop level, a drop of more than 2.8% from $21.15.