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Westlake Chemical (WLK) Stock Up 80% YTD: What's Driving It?
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Shares of Westlake Chemical Corporation (WLK - Free Report) have shot up around 80% year to date. The company has also significantly outperformed its industry’s gain of roughly 25% to over the same time frame.
Westlake Chemical has a market cap of roughly $13 billion. Average volume of shares traded in the last three months is around 819.2K. The company has an expected long-term earnings per share growth of 10.6%, just above the industry average of 10.3%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping earnings performance and an upbeat outlook have contributed to a rally in the company’s shares. Westlake Chemical recorded a net income of $210.8 million or $1.61 per share for the third quarter, a more than three-fold surge from $65.7 million or 51 cents a year ago. Adjusted earnings of $1.65 per share topped the Zacks Consensus Estimate of $1.39.
Net sales jumped 65% year over year to $2,108.9 million. Sales in the quarter benefited from significant contribution of Axiall acquisition, improved demand and increased selling prices for major products.
Westlake Chemical has an impressive earnings surprise history as the company has topped the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 23.5%.
Westlake Chemical, in its third-quarter call, said that its results benefited from increased demand for all major products in both Vinyls and Olefins segments along with higher prices in the Vinyls segment. The company sees increased ethylene availability with the start-up of new ethylene plants and completion of capacity expansions.
The company believes that the Axiall buyout and continued investments to improve the reliability and operational efficiency of its assets will enable it to fully leverage the improving Vinyls market. It also sees favorable demand trends for all of its major products to continue moving ahead.
Westlake Chemical should continue to benefit from the Axiall acquisition. The acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company is on track to realize around $120 million in synergies and cost savings related to the acquisition in 2017.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 115% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. Its shares are up roughly 65.7% year to date.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Westlake Chemical (WLK) Stock Up 80% YTD: What's Driving It?
Shares of Westlake Chemical Corporation (WLK - Free Report) have shot up around 80% year to date. The company has also significantly outperformed its industry’s gain of roughly 25% to over the same time frame.
Westlake Chemical has a market cap of roughly $13 billion. Average volume of shares traded in the last three months is around 819.2K. The company has an expected long-term earnings per share growth of 10.6%, just above the industry average of 10.3%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping earnings performance and an upbeat outlook have contributed to a rally in the company’s shares. Westlake Chemical recorded a net income of $210.8 million or $1.61 per share for the third quarter, a more than three-fold surge from $65.7 million or 51 cents a year ago. Adjusted earnings of $1.65 per share topped the Zacks Consensus Estimate of $1.39.
Net sales jumped 65% year over year to $2,108.9 million. Sales in the quarter benefited from significant contribution of Axiall acquisition, improved demand and increased selling prices for major products.
Westlake Chemical has an impressive earnings surprise history as the company has topped the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 23.5%.
Westlake Chemical, in its third-quarter call, said that its results benefited from increased demand for all major products in both Vinyls and Olefins segments along with higher prices in the Vinyls segment. The company sees increased ethylene availability with the start-up of new ethylene plants and completion of capacity expansions.
The company believes that the Axiall buyout and continued investments to improve the reliability and operational efficiency of its assets will enable it to fully leverage the improving Vinyls market. It also sees favorable demand trends for all of its major products to continue moving ahead.
Westlake Chemical should continue to benefit from the Axiall acquisition. The acquisition has diversified the company’s product portfolio and geographical operations, creating a North American leader in Olefins and Vinyls. The company is on track to realize around $120 million in synergies and cost savings related to the acquisition in 2017.
Westlake Chemical Corporation Price and Consensus
Westlake Chemical Corporation Price and Consensus | Westlake Chemical Corporation Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Koppers Holdings Inc. (KOP - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Kraton Corporation , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 115% year to date.
Kraton has an expected earnings growth of 25.4% for the current year. Its shares are up roughly 65.7% year to date.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>