WestRock (WRK) wins but delays the market: what you need to know

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OestRock (WRK) closed at $42.15 last trading session, marking a +0.96% move from the previous day. The stock lagged the S&P 500 daily gain of 1.21%. Meanwhile, the Dow Jones gained 1.03% and the tech-heavy Nasdaq gained 0.14%.

Going into today, shares of the paper and packaging company had gained 3.83% over the past month, outpacing the basic materials sector’s 7.3% loss and gain 3.2% of the S&P 500 during this period.

Wall Street will be looking for positivity from WestRock as its next earnings report date nears. That should be August 4, 2022. In this report, analysts expect WestRock to post earnings of $1.50 per share. This would mark 50% year-over-year growth. Meanwhile, our latest consensus estimate calls for revenue of $5.52 billion, up 14.52% from the prior year quarter.

For the full year, our Zacks consensus estimates call for earnings of $5.09 per share and revenue of $21.42 billion, which would represent swings of +50.15% and +14, 27%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for WestRock. These revisions help show the ever-changing nature of short-term trading trends. Thus, positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. To benefit from this, we have developed the Zacks Rank, a proprietary model that takes into account these estimation changes and provides an actionable rating system.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable track record of third-party audited success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection is down 0.42%. WestRock currently holds a Zacks rank of #3 (Hold).

Valuation is also important, so investors should note that WestRock currently has a Forward P/E ratio of 8.2. For comparison, its industry has an average Forward P/E of 8.2, which means WestRock is trading at an unnoticeable gap to the group.

We can also see that WRK currently has a PEG ratio of 0.37. This popular measure is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. The paper and allied products industry currently had an average PEG ratio of 0.37 at yesterday’s close.

The paper and allied products industry is part of the basic materials sector. This group has a Zacks Industry Rank of 139, which places it in the bottom 45% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to track all of these stock movement metrics, and more, at Zacks.com.

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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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