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Westlake Chemical (WLK) Stock Sinks As Market Gains: What You Should Know

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Westlake Chemical (WLK) closed the most recent trading day at $99.37, moving -1.53% from the previous trading session. This move lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq gained 0.2%.

Coming into today, shares of the chemical company had lost 21.98% in the past month. In that same time, the Basic Materials sector lost 6.58%, while the S&P 500 lost 8.32%.

Investors will be hoping for strength from Westlake Chemical as it approaches its next earnings release. In that report, analysts expect Westlake Chemical to post earnings of $6.53 per share. This would mark 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $22.44 per share and revenue of $15.33 billion, which would represent changes of +44.03% and +30.2%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Westlake Chemical. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 8.88% higher. Westlake Chemical currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Westlake Chemical has a Forward P/E ratio of 4.5 right now. This valuation marks a discount compared to its industry's average Forward P/E of 6.62.

Investors should also note that WLK has a PEG ratio of 0.14 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WLK's industry had an average PEG ratio of 0.17 as of yesterday's close.

The Chemical - Plastic industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 242, which puts it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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 Zacks.com.


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