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Research Alert: Wlk Q1: Double Miss On Weak Volumes

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

WLK reported Q1 sales of $2.65B, missing consensus by $130M, and an adjusted loss of $0.77 per share versus expected $0.24, with sales up 5% sequentially but down 7% Y/Y. Lower pricing and reduced volumes reflected persistent industry headwinds. We believe WLK faces structural challenges in PEM, where EBITDA margins remained depressed at just 2% despite sequential improvements, while HIP showed resilience with stable sales and strong 19% EBITDA margins. Management expects meaningful PEM margin expansion through summer 2026, driven by higher global feedstock costs from the Hormuz closure while North American natural gas remains advantageously priced. The company maintains a solid balance sheet with $2.5B cash against $5.6B debt, though operating cash flow was negative $94M on seasonal working capital build. We expect continued infrastructure and data center demand to benefit HIP, while residential construction headwinds from elevated rates will likely persist.

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