Westlake (NYSE:WLK) Shares Gap Down - Here's Why

Key Points

• Shares gapped down: Westlake opened sharply lower after Tuesday's close—prior close $123.39, open $114.25—and was last trading around $116.01 on a volume of ~226,573 shares.
• Mixed analyst view with a "Hold" consensus: MarketBeat's consensus is "Hold" with an average target of $105.53, though analyst targets and ratings vary (BMO upgraded to "Outperform" with a $127 target while others range as low as $80).
• Quarterly results were mixed: Westlake reported EPS of -$0.25 (beating the -$1.47 consensus) but revenue of $2.53B missed estimates and the company still shows a negative net margin (13.5%).

Westlake Corporation (NYSE:WLK - Get Free Report)'s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $123.39, but opened at $114.25. Westlake shares last traded at $116.0080, with a volume of 226,573 shares trading hands.

Analyst Ratings Changes

A number of equities analysts have commented on WLK shares. KeyCorp restated a "sector weight" rating on shares of Westlake in a research report on Tuesday, December 16th. BMO Capital Markets upgraded shares of Westlake from a "market perform" rating to an "outperform" rating and boosted their price target for the company from $108.00 to $127.00 in a research report on Thursday, March 5th. Morgan Stanley set a $80.00 price target on shares of Westlake in a research report on Monday, December 15th. Zacks Research upgraded shares of Westlake from a "strong sell" rating to a "hold" rating in a research report on Thursday, February 26th. Finally, Mizuho upped their target price on shares of Westlake from $97.00 to $110.00 and gave the stock a "neutral" rating in a research report on Monday, March 23rd. One analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating, nine have issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $105.53.

Westlake Price Performance

The stock's 50-day moving average price is $104.08 and its 200-day moving average price is $84.61. The company has a market capitalization of $15.05 billion, a price-to-earnings ratio of -10.01 and a beta of 0.75. The company has a quick ratio of 1.65, a current ratio of 2.24 and a debt-to-equity ratio of 0.55.

Westlake (NYSE:WLK - Get Free Report) last announced its earnings results on Tuesday, February 24th. The specialty chemicals company reported ($0.25) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($1.47) by $1.22. Westlake had a negative net margin of 13.50% and a negative return on equity of 1.22%. The company had revenue of $2.53 billion for the quarter, compared to analyst estimates of $2.61 billion. During the same period in the prior year, the business earned $0.06 earnings per share. Westlake's quarterly revenue was down 10.9% on a year-over-year basis. Equities research analysts anticipate that Westlake Corporation will post 6.48 earnings per share for the current year.

Westlake Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Wednesday, March 18th. Stockholders of record on Tuesday, March 3rd were given a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 1.8%. The ex-dividend date was Tuesday, March 3rd. Westlake's dividend payout ratio is presently -18.12%.

Insider Buying and Selling at Westlake

In related news, CFO Mark Steven Bender sold 17,409 shares of the business's 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 sale, the chief financial officer directly owned 44,433 shares of the company's stock, valued at $4,484,178.36. The trade was a 28.15% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. 1.30% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Westlake

Institutional investors and hedge funds have recently modified their holdings of the business. Caitong International Asset Management Co. Ltd bought a new stake in shares of Westlake during the third quarter worth approximately $28,000. Quarry LP bought a new stake in shares of Westlake during the fourth quarter worth approximately $31,000. Fifth Third Bancorp raised its stake in shares of Westlake by 71.3% during the fourth quarter. Fifth Third Bancorp now owns 562 shares of the specialty chemicals company's stock worth $42,000 after buying an additional 234 shares during the last quarter. CIBC Private Wealth Group LLC bought a new stake in shares of Westlake during the third quarter worth approximately $53,000. Finally, Hantz Financial Services Inc. raised its stake in shares of Westlake by 180.3% during the third quarter. Hantz Financial Services Inc. now owns 740 shares of the specialty chemicals company's stock worth $57,000 after buying an additional 476 shares during the last quarter. 28.40% of the stock is owned by institutional investors.

Westlake Company Profile

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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