What Are Analysts Saying About Westlake Chemical Partners LP’s (NYSE:WLKP) Future?

Westlake Chemical Partners LP’s (NYSE:WLKP) latest earnings announcement in December 2017 confirmed that the company gained from a strong tailwind, eventuating to a double-digit earnings growth of 15.61%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Westlake Chemical Partners’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for Westlake Chemical Partners

Market analysts’ consensus outlook for next year seems positive, with earnings growth more than doubling. However, earnings seem to drop of in the following year generating US$361.15M by 2021.

NYSE:WLKP Future Profit Apr 5th 18
NYSE:WLKP Future Profit Apr 5th 18

Even though it is useful to be aware of the growth year by year relative to today’s level, it may be more beneficial to analyze the rate at which the company is growing every year, on average. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Westlake Chemical Partners’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 31.70%. This means that, we can presume Westlake Chemical Partners will grow its earnings by 31.70% every year for the next couple of years.

Next Steps:

For Westlake Chemical Partners, I’ve compiled three fundamental factors you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is WLKP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WLKP is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WLKP? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!