Could Westlake's (WLK) Index Exit Reveal Shifts in Its Investor Base or Market Perception?

• Westlake Corporation (NYSE:WLK) was recently removed from the FTSE All-World Index, an important benchmark followed by global investors.
• This change can drive trading shifts from index-tracking funds, influencing shareholder composition and potentially reshaping Westlake's overall market perception.
• We'll explore how Westlake's recent removal from the FTSE All-World Index may shape its forward-looking investment narrative and outlook.

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Westlake Investment Narrative Recap

To own Westlake, you'd need to believe in the structural tailwinds from U.S. infrastructure and housing demand, and the company's ability to stabilize margins in Performance and Essential Materials, despite industry overcapacity. Westlake’s removal from the FTSE All-World Index may trigger some short-term fund outflows, but for now, it doesn’t fundamentally alter the most important catalyst, anticipated recovery in infrastructure spend, or the persistent challenges of global pricing pressure and cost inflation.

Among recent company updates, Westlake’s Q2 2025 earnings stand out, highlighting continued losses and revenue declines as pricing pressures and higher costs weigh on performance. These earnings trends reinforce the risk that margin compression, rather than index changes, remains the more significant near-term concern for investors monitoring business turnaround signals.

However, investors should also be aware that, despite strong U.S. infrastructure demand, the persistent risk of global oversupply and weak pricing continues to test Westlake's profitability...

Read the full narrative on Westlake (it's free!)

Westlake's outlook forecasts $13.0 billion in revenue and $893.8 million in earnings by 2028. This is based on an expected annual revenue growth rate of 3.5% and an increase in earnings of $960.8 million from the current -$67.0 million.

Uncover how Westlake's forecasts yield a $90.07 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members offered two fair value estimates for Westlake, spanning US$77.11 to US$90.07 per share. While some focus on structural U.S. demand, the sustained impact from global oversupply remains a key challenge you should weigh alongside this wide range of viewpoints.

Explore 2 other fair value estimates on Westlake - why the stock might be worth 6% less than the current price!

Build Your Own Westlake Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Westlake research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Westlake research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Westlake's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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