Alembic Global analyst Hassan Ahmed maintained a Buy rating on Westlake Chemical Corp (WLK) today and set a price target of $100. The company’s shares opened today at $72.36.
Ahmed wrote:
“We peg recurring EPS at USD1.02¾a big miss relative to the consensus estimate of USD1.68. Q4 reported EBITDA of USD374m also missed the consensus, which was USD474m. Year-over-year, Olefins segment volumes rose 8.4%, while Vinyl segment volumes increased 0.4%. Olefins segment pricing declined 13.1% y-o-y, while Vinyls segment pricing expanded 0.2%. The company attributed lower y-o-y earnings to higher ethane costs and lower polyethylene and styrene prices. Our analysis suggests that, going by the company-provided IHS pricing stack, y-o-y EBITDA should have been flat-ish.We believe the main culprit behind the miss could very well be FIFO accounting, which is a negative in a declining production cost environment like Q4’18’s. We will attempt to clarify this on the call.”
According to TipRanks.com, Ahmed has 0 stars on 0-5 star ranking scale with an average return of -5.0% and a 36.9% success rate. Ahmed covers the Consumer Goods sector, focusing on stocks such as LyondellBasell, Celanese Corp, and Huntsman Corp.
Westlake Chemical Corp has an analyst consensus of Hold, with a price target consensus of $81.33.
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The company has a one-year high of $124.30 and a one-year low of $59.78. Currently, Westlake Chemical Corp has an average volume of 795.8K.
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Westlake Chemical Corp. manufactures and markets petrochemicals, polymers and fabricated building products. It operates through the Olefins and Vinyls segments. The Olefins segment manufactures ethylene, polyethylene, styrene, and associated co-products at the manufacturing facility in Lake Charles and polyethylene at the Longview facility.
