Westlake Chemical Corporation’s WLK shares have popped 17.8% over the past three months. The rally has resulted in the stock outperforming its industry’s rise of 13.9% over the same time frame. The company has also topped the S&P 500’s 6.9% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #1 (Strong Buy) stock’s price appreciation.
What’s Working in WLK’s Favor?
Forecast-topping first-quarter results and upbeat outlook have contributed to the gain in the company’s shares. Westlake Chemical’s earnings of $1.87 per share for the first quarter topped the Zacks Consensus Estimate of $1.56. Sales rose around 22% year over year to $2,357 million and also surpassed the Zacks Consensus Estimate of $1,998.2 million.
The company benefited from increased sales prices and margins for most of its key products including polyethylene and polyvinyl chloride (PVC) resin, and strong demand in downstream building products business in the first quarter.
Westlake Chemical 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. The company remains focused on operating its facilities safely and efficiently.
The company 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 | Westlake Chemical Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, Cabot Corporation CBT and Impala Platinum Holdings Limited IMPUY.
Nucor has a projected earnings growth rate of 229.3% for the current year. The company’s shares have rallied around 149% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have surged 74% in the past year. It currently sports a Zacks Rank #1.
Impala Platinum has an expected earnings growth rate of 225.2% for the current fiscal. The company’s shares have surged around 161% in the past year. It currently carries a Zacks Rank #2 (Buy).
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Westlake Chemical Corporation (WLK) : Free Stock Analysis Report
Nucor Corporation (NUE) : Free Stock Analysis Report
Cabot Corporation (CBT) : Free Stock Analysis Report
Impala Platinum Holdings Ltd. (IMPUY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research