Quaker Chemical (KWR) Earnings Preview: Q3 Report Expected Tuesday

in EARNINGS/INVESTING IDEAS by

Quaker Chemical Corporation is a mid-cap stock with a market capitalization of $2.855 billion and a total enterprise value of $2.807 billion. The company operates in the Materials sector and Chemicals industry.

Quaker Chemical Corporation (NYSE:KWR) is scheduled to report Q3 earnings results on November 12, 2019 after close. The company is expected to report earnings of $1.38/share on revenue of $325.0 million. The consensus earnings per share (EPS) of $1.38/share is based on a poll of 5 analysts and represents a decline of -13.8% over the same quarter last year when the company reported earnings of $1.60/share.

The revenue forecast of $325.0 million based on a poll of 4 analysts implies a year-over-year (YoY) growth of 46.4%. Last year the company reported $222.0 million in revenue for the quarter.

Expected to report EPS decline of -$0.22/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $325.00 $222.02 46.4%
EPS $1.38 $1.60 -13.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Quaker Chemical for this earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2019 $1.57 $1.56 -0.6% Missed
Q1, 2019 $1.42 $1.41 -0.7% Missed
Q4, 2018 $1.45 $1.51 4.1% Beat
Q3, 2018 $1.52 $1.60 5.3% Beat
Q2, 2018 $1.41 $1.56 10.6% Beat
Q1, 2018 $1.24 $1.38 11.7% Beat
Q4, 2017 $1.25 $1.27 1.6% Beat
Q3, 2017 $1.25 $1.32 5.6% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Quaker Chemical’s stock price performance? It’s more important for some companies than for others. In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by falling by -10.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-01 $187.39 $168.66 -10.0% Decline
2019-05-02 $222.24 $214.94 -3.3% Decline
2019-02-28 $209.89 $208.94 -0.5% Decline
2018-11-01 $179.90 $203.91 13.3% Increase

Fundamentals And Technical Analysis

Quaker Chemical is currently trading at $161.05/share, up 1.7% for the day. The company is trading at approximately 71.8% of its 52 week high of $224.30/share. The company’s stock price is down -14.1% since the last earnings report and up 0.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 51.87 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 49.1x and a forward P/E multiple of 32.8x. Quaker Chemical’s current share price also implies a price-to-book (P/B) multiple of 6.2x. The following table summarizes some other key fundamental ratios:

Data as of November 11, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $161.05
P/E Ratio 49.1x
P/E Ratio (Fwd) 32.8x
PEG Ratio 0.8
Total Debt to Capital (%) 1.3%
Levered Free Cash Flow $68.647 million
Enterprise Value / EBITDA 23.4x

Company Profile: Quaker Chemical Corporation

Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications in North America, Europe, the Middle East, Africa, the Asia/Pacific, and South America.

The company’s products include rolling lubricants used by manufacturers of steel in the hot and cold rolling of steel, and aluminum in the hot rolling of aluminum; machining and grinding compounds for use in cutting, shaping, and grinding metal parts; hydraulic fluids for steel, metalworking, and other customers to operate hydraulic equipment; corrosion preventives to protect metals during manufacture, storage, and shipment; and specialty greases used in automotive and aerospace production processes, steel manufacturing, and various other applications. It also provides metal finishing compounds to prepare metal surfaces for special treatments, such as galvanizing and tin plating, as well as to prepare metal for further processing; forming compounds used to facilitate the drawing and extrusion of metal products; chemical milling maskants for the aerospace industry; and temporary and permanent coatings for metal and concrete products.

In addition, the company offers construction products comprising flexible sealants and protective coatings for various applications; bio-lubricants used in machinery in forestry and construction industries; and die casting lubricants, as well as provides chemical management services. It serves steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and other industries.

The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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