Westlake shares moved -13.15% over the last 52 weeks, with a high of $139.52 and a low of $80.77. During this time, the stock basically tracked the performance of the S&P 500. As of January 2022, the company's 50-day average price is $117.0.
None. The large-cap Industrials company is based in Houston, TX. Westlake has returned a 1.33% dividend yield over the last 12 months.
The Company's Is Growing Its Business With Minimal Leverage:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $8,118 | $7,504 | $11,778 | $15,794 |
| Revenue Growth | n/a | -7.56% | 56.96% | 34.1% |
| Gross Margins | 15.52% | 13.63% | 29.67% | 25.79% |
| Gross Margins Growth | n/a | -12.18% | 117.68% | -13.08% |
| Operating Margins | 8.08% | 5.72% | 23.77% | 19.31% |
| Operating Margins Growth | n/a | -29.21% | 315.56% | -18.76% |
| Net Margins | 5.19% | 4.4% | 17.11% | 14.23% |
| Net Margins Growth | n/a | -15.22% | 288.86% | -16.83% |
| Earnings Per Share | $3.28 | $2.58 | $15.76 | $17.62 |
| EPS Growth | n/a | -21.34% | 510.85% | 11.8% |
| Diluted Shares (MM) | 128 | 128 | 128 | 128 |
| Free Cash Flow (MM) | $514 | $772 | $1,736 | $2,287 |
| FCF Growth | n/a | 50.19% | 124.87% | 31.74% |
| Capital Expenditures (MM) | $787 | $525 | $658 | $1,108 |
| LT Debt to Equity | 0.59 | 0.59 | 0.65 | 0.49 |
The Market Is Undervaluing Westlake:
Compared to the Industrials sector's average of 20.49, Westlake has a trailing twelve month P/E ratio of 6.18 and, according to its EPS guidance of 12.38, an expected P/E ratio of 8.78. Westlake's PEG ratio is 0.07 based on its 82.8% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Westlake's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 0.47, which still suggests that company's shares are possibly undervalued.
Furthermore, Westlake is likely undervalued in terms of its equity because its P/B ratio is 1.46 compared to its sector average of 3.78. The company's shares are currently trading -15.32% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 9.39 * 77.97) = $128.35
Most of the Market Indicators on Westlake Are Negative:
17 analysts are following Westlake and have set target prices ranging from $103.0 to $142.0 per share. On average, they have given the company a rating of hold. At the current price of $108.69, WLK is trading -12.1% away from its average analyst target price of $123.65 per share, implying an analyst consensus of some upside potential for the stock.
The company has no information on the number of shares sold short since 8.0% of the company's shares are tied to short positions. Institutions own 29.73% of Westlake's shares, while the insider ownership rate stands at 74.22%. The biggest shareholder is FMR, LLC with a 3% stake in the company worth approximately $390,703,930.
