Westlake (NYSE:WLK) Posts Earnings Results, Misses Expectations By $0.15 EPS

Key Points

• Westlake reported a quarterly EPS of ($0.09), falling short of expectations by $0.15, with revenue also down significantly at $2.95 billion compared to anticipated $3 billion.
• The company announced a quarterly dividend of $0.4714 per share, with a resulting annualized yield of 2.2%, despite a dividend payout ratio of 70.47%.
• Westlake's stock has seen significant analyst rating adjustments, with price targets reduced by various firms, leading to an average price target of $93.77 and an overall rating of "Hold."

Westlake (NYSE:WLK - Get Free Report) released its quarterly earnings results on Tuesday. The specialty chemicals company reported ($0.09) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.06 by ($0.15), Zacks reports. The firm had revenue of $2.95 billion during the quarter, compared to analysts' expectations of $3 billion. Westlake had a positive return on equity of 1.26% and a negative net margin of 0.57%. The business's quarterly revenue was down 7.9% on a year-over-year basis. During the same quarter last year, the business earned $2.40 earnings per share.

Westlake Price Performance

WLK traded down $3.01 during trading on Friday, reaching $79.06. The company's stock had a trading volume of 1,230,702 shares, compared to its average volume of 1,246,577. The company has a quick ratio of 1.86, a current ratio of 2.47 and a debt-to-equity ratio of 0.43. The firm has a fifty day simple moving average of $79.07 and a two-hundred day simple moving average of $91.28. Westlake has a 1 year low of $68.55 and a 1 year high of $153.34. The company has a market cap of $10.14 billion, a price-to-earnings ratio of -149.17, a PEG ratio of 49.13 and a beta of 0.92.

Westlake Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 4th. Shareholders of record on Tuesday, August 19th will be paid a $0.53 dividend. This represents a $2.12 dividend on an annualized basis and a yield of 2.7%. This is a positive change from Westlake's previous quarterly dividend of $0.47. Westlake's dividend payout ratio (DPR) is -396.23%.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Royal Bank of Canada lifted its stake in Westlake by 90.0% in the 1st quarter. Royal Bank of Canada now owns 38,687 shares of the specialty chemicals company's stock worth $3,869,000 after purchasing an additional 18,321 shares in the last quarter. AQR Capital Management LLC lifted its stake in Westlake by 9.6% in the 1st quarter. AQR Capital Management LLC now owns 19,094 shares of the specialty chemicals company's stock worth $1,881,000 after purchasing an additional 1,668 shares in the last quarter. Cetera Investment Advisers lifted its stake in Westlake by 43.6% in the 2nd quarter. Cetera Investment Advisers now owns 4,350 shares of the specialty chemicals company's stock worth $330,000 after purchasing an additional 1,320 shares in the last quarter. Finally, United Services Automobile Association purchased a new position in Westlake in the 1st quarter worth approximately $211,000. 28.40% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

A number of equities analysts have recently issued reports on the company. Piper Sandler dropped their price target on Westlake from $105.00 to $100.00 and set a "neutral" rating on the stock in a research note on Wednesday, May 14th. BMO Capital Markets raised their price target on Westlake from $91.00 to $94.00 and gave the stock a "market perform" rating in a research note on Wednesday. Citigroup raised their price target on Westlake from $85.00 to $95.00 and gave the stock a "buy" rating in a research note on Tuesday, July 8th. Bank of America lowered their target price on Westlake from $90.00 to $84.00 and set a "buy" rating on the stock in a research report on Wednesday, June 18th. Finally, JPMorgan Chase & Co. lowered their target price on Westlake from $110.00 to $82.00 and set a "neutral" rating on the stock in a research report on Tuesday, May 6th. One investment analyst has rated the stock with a sell rating, six have assigned a hold rating, eight have assigned a buy rating and one has issued a strong buy rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $92.93.

About Westlake

Westlake Corporation engages in the manufacture and marketing of performance and essential materials, and housing and infrastructure products in the United States, Canada, Germany, China, Mexico, Brazil, France, Italy, Taiwan, and internationally. The company operates through two segments: Performance and Essential Materials and Housing and Infrastructure Products.