Westlake Chemical Corporation
’s
WLK
stock looks promising at the moment. The company’s shares have gained roughly 34% over the past six months.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Westlake Chemical currently has a Zacks Rank #1 (Strong Buy) and a
VGM Score
of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.
Let’s delve deeper into the factors that make this chemical maker an attractive choice for investors right now.
Price Performance
Shares of Westlake Chemical have surged 174.3% over the past year against the 171.7% rise of its
industry
. It has also outperformed the S&P 500’s roughly 66.3% rise over the same period.
Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for Westlake Chemical for 2021 has increased around 71.1%. The favorable estimate revisions instill investor confidence in the stock.
Strong Growth Prospects
The Zacks Consensus Estimate for earnings for 2021 for Westlake Chemical is currently pegged at $6.01, reflecting an expected year-over-year growth of 162.5%. Moreover, earnings are expected to register a 109.2% growth in first-quarter 2021. The company also has an expected long-term earnings per share growth rate of 32%, well above the industry average of 26.1%.
Positive Earnings Surprise History
Westlake Chemical has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 318.1%, on average.
Solid Q4 and Upbeat Prospects
Westlake Chemical’s profits climbed around 57% year over year to $113 million or 87 cents per share in the fourth quarter of 2020. Earnings per share also trounced the Zacks Consensus Estimate of 68 cents. Sales rose around 4% year over year to $1,965 million and surpassed the Zacks Consensus Estimate of $1,884 million.
The company benefited from increased sales prices and margins for polyethylene and polyvinyl chloride (“PVC”) resin and strong demand in downstream building products business in the quarter. Westlake Chemical, in its fourth-quarter call, stated that it expects the strength in global demand in polyethylene and PVC along with the increase in housing starts and new building permits to continue this year.
Westlake Chemical should benefit from higher demand in its polyethylene business in specialty applications, especially food packaging, and strength in global demand for PVC resin. It is seeing strong demand in the downstream building products business on the back of new housing starts and spending on repair and remodeling activities.
The company will also gain from its capacity expansion projects, synergies of acquisitions, and actions to improve operating efficiency and reduce costs. It is also making disciplined investments, developing new products and leveraging its current products and footprint globally.
Westlake Chemical Corporation Price and Consensus
Westlake Chemical Corporation price-consensus-chart
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Westlake Chemical Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include
Nucor Corporation
NUE
,
BHP Group
BHP
and
United States Steel Corporation
X
.
Nucor has a projected earnings growth rate of 90.4% for the current year. The company’s shares have surged around 122% in a year. It currently sports a Zacks Rank #1. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
BHP Group has a projected earnings growth rate of 76.8% for the current fiscal year. The company’s shares have shot up around 106% in a year. It currently carries a Zacks Rank #1.
U.S. Steel has an expected earnings growth rate of 176.5% for the current year. The company’s shares have surged around 282% in the past year. It currently carries a Zacks Rank #2.
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