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Westlake Chemical Down to Strong Sell on Soft Results

Zacks Investment Research downgraded Westlake Chemical Partners LPWLKP to a Zacks Rank #5 (Strong Sell) on Dec 23, 2015. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market over the next few quarters.

Why the Downgrade?

Westlake Chemical Partners failed to create a positive stir in the market since the beginning of 2015, as evident from a negative year-to-date fall of 24.6% in the stock price. Also, the firm's weak financial performance in the last four quarters led to an average negative earnings surprise of 7.12%. Last quarter, the company's net income of 37 cents per limited partner unit lagged the Zacks Consensus Estimate of 42 cents.

The top-line performance was weak as revenues fell 36.6% year over year due to sales decline in Westlake Chemical Corporation and lower revenue generation from co-product, ethylene and other sales to third parties. Gross margin came in at 37.9% versus 42.1% in the year-ago quarter.

Disappointing results have weakened investors' confidence in Westlake Chemical Partners. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 3.2% to $1.49 per limited partner unit for 2015 and 7.5% to $1.85 per limited partner unit for 2016.

Stocks to Consider

Presently, Westlake Chemical Partners has a market capitalization of $560 million. Better-ranked stocks in the chemical-specialty industry include KMG Chemicals Inc. KMG , Chemtura Corporation CHMT and Flexible Solutions International Inc. FSI . While KMG Chemicals sports a Zacks Rank #1 (Strong Buy), both Chemtura Corporation and Flexible Solutions International carry a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CHEMTURA CORP (CHMT): Free Stock Analysis Report

KMG CHEMICALS (KMG): Free Stock Analysis Report

WESTLAKE CHEMCL (WLKP): Free Stock Analysis Report

FLEXIBLE SOLTNS (FSI): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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