Westlake stock drops after J.P. Morgan downgrades, citing recession risk, low dividend yield Shares of Westlake Corp. dropped 1.4% in premarket trading Friday, after J.P. Morgan downgraded the building products and petrochemicals company, citing increasing risks of a global economic recession and valuation. The stock had soared 37.3% year to date to close Thursday just 5.0% below its May 4 record close of $140.33, while the SP 500 has shed 12.4% this year. Analyst Zekauskas cut his rating to neutral, after being at overweight for the past 18 months. "[W]e think that recessionary risks may weigh down the trading multiples of more cyclical companies such as [Westlake]," Zekauskas wrote in a note to clients. "It may be the case that investors think harder about taking profits in [Westlake] shares as interest rates rise, given [Westlake''s] marked level of outperformance." Zekauskas also believes Westlake''s stock is "not the optimal vehicle" to capture the rally in commodity prices, and doesn''t have a high normal dividend like its competitors. At Thursday''s closing prices, Westlake''s implied dividend yield is 0.89%, compared with the yields for LyondellBasell Industries N.V. of 4.37%, for Dow Inc. of 4.11% and the implied yield for the SP 500 of 1.54%.