Multiple Firms Initiate Coverage On Westlake Chemical Partners Following End Of Quiet Period

Following the end of the quiet period, analysts at multiple firms on Monday initiated coverage on Westlake Chemical Partners LP WLKP.

Analysts see upside in shares of Westlake Chemical Partners for several reasons. Firstly, the ethylene industry is in the longest and strongest cycle in its history; domestic ethane surpluses are providing cost advantages for ethylene production. In addition, analysts expect strength in U.S. ethylene margins to extend to 2017 or beyond.

Furthermore, Westlake appears to be a low risk, balanced way to play U.S. ethylene cycle. Westlake has locked in a “10 c/lb ethylene margin through a 10 percent ownership interest in OpCo.”

Analysts also expect Westlake to acquire additional ownership interest in OpCo.

• Deutsche Bank - Initiated coverage with Buy and $40 price target.
• Bank Of America - Initiated coverage with Neutral rating and $34 price target.
• UBS - Initiated coverage with Buy rating and $37 price target.
• Goldman Sachs - Initiated coverage with Neutral rating and $35 price target.
• Barclays - Initiated coverage with Equal-weight rating and $38 price target.
• Wells Fargo - Initiated coverage with Market Perform rating and price target of $32 to $35.