abstract art circle clockwork

Westlake Chemical (NYSE:WLKP) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Westlake Chemical Partners LP (NYSE:WLKP) is scheduled to report Q3 earnings results before markets open for trading on November 3, 2020.

The company is expected to report earnings of $0.46/share on revenue of $262 million. The consensus earnings per share (EPS) of $0.46/share is based on a poll of 6 analysts and represents a growth in eps of 10.2% over the same quarter last year, when the company reported earnings of $0.42/share.

The revenue forecast of $262 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 4.8%. Last year the company reported $249.9 million in revenue for the quarter.

Expected to report EPS growth of 10.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $262.02 $249.93 4.8%
EPS $0.46 $0.42 10.2%

Earnings Call Trends

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

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

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.47 $0.43 −8.8% Missed
Q1, 2020 $0.52 $0.50 −4.6% Missed
Q4, 2019 $0.48 $0.49 1.6% Beat
Q3, 2019 $0.48 $0.42 −11.7% Missed
Q2, 2019 $0.46 $0.39 −15.4% Missed
Q1, 2019 $0.41 $0.46 12.2% Beat
Q4, 2018 $0.46 $0.37 −20.2% Missed
Q3, 2018 $0.40 $0.38 −5.6% Missed

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, 2020, the stock price reacted by falling −1.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $19.50 $19.16 −1.7% Decline
May 4, 2020 $18.51 $18.90 2.1% Increase
February 18, 2020 $22.78 $23.11 1.4% Increase
November 5, 2019 $23.07 $23.47 1.7% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −4.23, the model suggests that the company is not likely to be an earnings manipulator. A value of −4.23 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Westlake Chemical Partners LP is currently trading at $18.45/share, down −1.3% for the day. The company is trading at approximately 70.1% of its 52-week high of $26.48/share. The company’s stock price is down −3.7% since the last earnings report and down −1.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 37.30 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WLKP Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 10.03 and a forward P/E multiple of 10.46.

Westlake Chemical Partners LP’s current share price also implies a price-to-book (P/B) multiple of 1.25. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $18.45
P/E Ratio 10.0x
P/E Ratio (Fwd) 10.5x
PEG Ratio 0.7
Total Debt / Total Capital 27.2%
Levered Free Cash Flow $422.1 million
EV / EBITDA 3.1x

Finbox

Westlake Chemical Partners LP is a small-cap stock with a market capitalization of $657.8 million and a total enterprise value of $1.451 billion. The company operates in the Materials sector and the Chemicals industry.

Westlake Chemical Partners LP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company’s ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, including propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. The company was founded in 2014 and is headquartered in Houston, Texas.

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.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.