Back to top

Image: Bigstock

Westlake Chemical (WLK) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Westlake Chemical (WLK - Free Report) closed at $92.03, marking a +1.13% move from the previous day. This move lagged the S&P 500's daily gain of 1.92%. Elsewhere, the Dow gained 2.15%, while the tech-heavy Nasdaq added 0.16%.

Prior to today's trading, shares of the chemical company had lost 9.82% over the past month. This has was narrower than the Basic Materials sector's loss of 20.12% and lagged the S&P 500's gain of 1.54% in that time.

Westlake Chemical will be looking to display strength as it nears its next earnings release. On that day, Westlake Chemical is projected to report earnings of $6.53 per share, which would represent year-over-year growth of 61.63%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.17 billion, up 46.01% from the year-ago period.

WLK's full-year Zacks Consensus Estimates are calling for earnings of $22.44 per share and revenue of $15.33 billion. These results would represent year-over-year changes of +44.03% and +30.2%, respectively.

Investors should also note any recent changes to analyst estimates for Westlake Chemical. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Westlake Chemical is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that Westlake Chemical has a Forward P/E ratio of 4.06 right now. This valuation marks a discount compared to its industry's average Forward P/E of 6.1.

We can also see that WLK currently has a PEG ratio of 0.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WLK's industry had an average PEG ratio of 0.16 as of yesterday's close.

The Chemical - Plastic industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 243, putting it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WLK in the coming trading sessions, be sure to utilize

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Westlake Corp. (WLK) - free report >>

Published in