UPDATE: J.P. Morgan Downgrades Westlake Chemical on Mixed Factors
In a report published Wednesday, J.P. Morgan analyst Jeffrey J. Zekauskas downgraded the rating on Westlake Chemical Corporation (NYSE: WLK) from Overweight to Neutral, but reiterated the $114.00 price target.
In the report, J.P. Morgan noted, “Westlake at the current price of $106.82 is approaching our December 2014 price target of $114 and year-ahead capital appreciation potential now appears to us to be more limited. In addition, there are some commodity trends, particularly in the vinyls chain that are shaping up unfavorably, which may weigh down on the share price over a shorter period of time. Caustic soda prices in the export market decreased $45/short ton in August and we expect the decreases to move the domestic contract market lower. Domestic caustic prices could average $50/st lower sequentially in 4Q:13 judging by some depressed export cargo prices. The fourth quarter also tends to be a period of weaker demand in PVC and typically PVC prices can give back a few cents per pound as business for 2014 is re-priced. In Olefins, Polyethylene price increases for September are not out of the question.”
Westlake Chemical Corporation closed on Tuesday at $106.82.
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