Westlake (NYSE:WLK) Shares Gap Down After Earnings Miss

Key Points

• Earnings miss: Westlake reported EPS of ($0.77) versus a ($0.22) consensus (a $0.55 miss) and saw revenue fall 6.8% year‑over‑year, driving the stock to gap down from $114.87 to an $102.70 open and trade around $104.30.
• Dividend retained: The company paid a $0.53 quarterly dividend (annualized $2.12) for a ~2.0% yield, despite a negative payout ratio of -18.12% reflecting the firm's losses.
• Mixed analyst views and insider selling: Analysts hold a consensus "Hold" with an average target of $113.20 (range roughly $97–$125), and the CFO sold 17,409 shares (a 28.15% reduction), while insiders own about 1.4% of the stock.

Shares of Westlake Corporation (NYSE:WLK - Get Free Report) gapped down prior to trading on Tuesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $114.87, but opened at $102.70. Westlake shares last traded at $104.2950, with a volume of 216,790 shares trading hands.

The specialty chemicals company reported ($0.77) earnings per share for the quarter, missing the consensus estimate of ($0.22) by ($0.55). Westlake had a negative return on equity of 1.22% and a negative net margin of 13.50%.The company's quarterly revenue was down 6.8% compared to the same quarter last year. During the same quarter last year, the company posted ($0.31) EPS.

Westlake Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Wednesday, March 18th. Shareholders of record on Tuesday, March 3rd were issued a $0.53 dividend. The ex-dividend date was Tuesday, March 3rd. This represents a $2.12 dividend on an annualized basis and a yield of 2.0%. Westlake's dividend payout ratio is presently -18.12%.

Wall Street Analysts Forecast Growth

WLK has been the subject of a number of recent research reports. Morgan Stanley set a $115.00 price objective on shares of Westlake in a report on Tuesday. Zacks Research upgraded shares of Westlake from a "strong sell" rating to a "hold" rating in a report on Thursday, February 26th. Wall Street Zen downgraded shares of Westlake from a "hold" rating to a "sell" rating in a report on Sunday. Mizuho raised their price target on shares of Westlake from $97.00 to $110.00 and gave the stock a "neutral" rating in a report on Monday, March 23rd. Finally, Wells Fargo & Company raised their price target on shares of Westlake from $110.00 to $125.00 and gave the stock an "equal weight" rating in a report on Monday, April 6th. One analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, ten have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average target price of $113.20.

Insider Buying and Selling at Westlake

In related news, CFO Mark Steven Bender sold 17,409 shares of the stock in a transaction that occurred on Friday, February 27th. The shares were sold at an average price of $100.92, for a total transaction of $1,756,916.28. Following the completion of the transaction, the chief financial officer owned 44,433 shares of the company's stock, valued at approximately $4,484,178.36. This trade represents a 28.15% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Insiders own 1.40% of the company's stock.

Hedge Funds Weigh In On Westlake

Several hedge funds and other institutional investors have recently added to or reduced their stakes in WLK. Royal Bank of Canada boosted its position 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 valued at $3,869,000 after buying an additional 18,321 shares during the period. AQR Capital Management LLC raised its stake in Westlake by 9.6% during the 1st quarter. AQR Capital Management LLC now owns 19,094 shares of the specialty chemicals company's stock worth $1,881,000 after acquiring an additional 1,668 shares in the last quarter. United Services Automobile Association acquired a new stake in Westlake during the 1st quarter worth $211,000. Cetera Investment Advisers raised its stake in Westlake by 43.6% during the 2nd quarter. Cetera Investment Advisers now owns 4,350 shares of the specialty chemicals company's stock worth $330,000 after acquiring an additional 1,320 shares in the last quarter. Finally, Prudential Financial Inc. raised its stake in Westlake by 18.2% during the 2nd quarter. Prudential Financial Inc. now owns 3,788 shares of the specialty chemicals company's stock worth $288,000 after acquiring an additional 582 shares in the last quarter. Hedge funds and other institutional investors own 28.40% of the company's stock.

Westlake Price Performance

The company's 50 day moving average is $111.45 and its 200 day moving average is $88.93. The company has a current ratio of 2.24, a quick ratio of 1.65 and a debt-to-equity ratio of 0.55. The stock has a market capitalization of $13.54 billion, a price-to-earnings ratio of -9.00 and a beta of 0.67.

About Westlake

Westlake Corp. is a global manufacturer of petrochemicals, polymers and building products, serving customers across industrial and residential markets. The company's core operations encompass the production of vinyls—primarily polyvinyl chloride (PVC) and its key feedstock vinyl chloride monomer (VCM)—as well as chlor-alkali products including caustic soda and chlorine. In addition, Westlake produces ethylene, propylene and specialty elastomers, along with construction-related materials such as vinyl siding, trim, windows and roofing systems.

Operating a network of vertically integrated plants and distribution centers, Westlake serves markets in North America, Europe and Asia.

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