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Here's Why You Should Buy Westlake Chemical (WLK) Right Now

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·4 min read
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Westlake Chemical Corporation’s WLK stock looks promising at the moment. The company’s shares have popped roughly 17% over the past three 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 B. 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 are up 23.6% year to date against the 22.5% rise of its industry. It has also outperformed the S&P 500’s roughly 11.8% rise over the same period.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Estimates Northbound

Over the past two months, the Zacks Consensus Estimate for Westlake Chemical for 2021 has increased around 58.6%. The consensus estimate for second-quarter 2021 has also been revised 60.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Solid Growth Prospects

The Zacks Consensus Estimate for earnings for 2021 for Westlake Chemical is currently pegged at $8.82, reflecting an expected year-over-year growth of 285.2%. Moreover, earnings are expected to register a 2,690.9% growth in second-quarter 2021. The company also has an expected long-term earnings per share growth rate of 46.7%, above the industry average of 37.3%.

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 319.6%, on average.

Growth Drivers in Place

Westlake Chemical should benefit from higher demand in its polyethylene business in specialty applications, especially food packaging, and strength in global demand for polyvinyl chloride (“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, in its first-quarter call, said that it sees continued strong global demand in polyethylene, PVC and downstream building products on strong markets for the downstream uses of its products including residential construction, packaging and healthcare.

Westlake Chemical 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 and Consensus
Westlake Chemical Corporation Price and Consensus

Westlake Chemical Corporation price-consensus-chart | Westlake Chemical Corporation Quote

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Dow Inc. DOW, Nucor Corporation NUE and Cabot Corporation CBT.

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 68% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has a projected earnings growth rate of 238% for the current year. The company’s shares have rallied around 137% in a year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have shot up 70% in the past year. It currently carries a Zacks Rank #1.

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Westlake Chemical Corporation (WLK) : Free Stock Analysis Report

Nucor Corporation (NUE) : Free Stock Analysis Report

Dow Inc. (DOW) : Free Stock Analysis Report

Cabot Corporation (CBT) : Free Stock Analysis Report

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