The first-quarter results for Westlake Corporation (NYSE:WLK) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$3.0b were what the analysts expected, Westlake surprised by delivering a (statutory) profit of US$1.34 per share, an impressive 26% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Westlake

Taking into account the latest results, Westlake's 14 analysts currently expect revenues in 2024 to be US$12.3b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 273% to US$7.42. Before this earnings report, the analysts had been forecasting revenues of US$12.3b and earnings per share (EPS) of US$7.13 in 2024. So the consensus seems to have become somewhat more optimistic on Westlake's earnings potential following these results.

There's been no major changes to the consensus price target of US$157, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Westlake at US$185 per share, while the most bearish prices it at US$123. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Westlake shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Westlake's past performance and to peers in the same industry. We would highlight that Westlake's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Westlake is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Westlake's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Westlake. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Westlake analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Westlake that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.