_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Westrock Company (XNYS:WRK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WRK
Name:
WESTROCK COMPANY (XNYS:WRK)
Sector:
79.70M
Industry:
Packaging & Containers
CEO:
Mr. Steven Voorhees
Total Employees:
49,900
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 5.75% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF WESTROCK COMPANY(WRK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGING & CONTAINERS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
39.64
One Month Price Target:
$39.87
Six Month Price Target :
$41.03
Likely Price in One Year's Time:
Ticker:
$42.41
Likely Trading Range Today Under (Normal Volatility)
$39.45
Price Upper limit ($) :
$39.86
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$37.2
This week:
$34.19
This month :
$28.74
Other Primary facts
Market Cap:
10.08B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
254.30M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.16%
-17.32%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$50.95
$45.77
$28.33
$33.51
Medium risk (<10%) entry points
Buy Call
Sell Call
$44.08
Buy Put:
Sell Put:
$42.98
$35.18
$36.30
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WRK
Sharpe Ratio:
1.12%
Comparison:
WRK, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -28.14% lower than the industry
& is -50.66% lower than the market/S&P 500 average
Average Returns/Yield of
WRK
Daily returns:
0.04%
Weekly returns:
0.21%
Monthly returns:
0.85%
Yearly returns:
11.46%
Comparison of returns:
Average annual returns/yield (last 3 years) is -10.45% below industry average
Classification:
WRK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.25
Statistical test of Returns:
WRK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.01%
Weekly Volatility:
6.74%
Monthly Volatility:
13.48%
Yearly Volatility:
46.69%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.26%
Volatility in last five trading days has been -58.29% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.15%
Weekly VaR:
-13.75%
Monthly VaR:
-27.49%
How Much Can the price of
WRK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$30.20
This translates to price declining to:
$5.95
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
WRK is a 94.02% riskier investment compared to the market/S&P 500 & is 66.22% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 26.29% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WRK
Beta in relation to market/S&P 500--1.04
Expected beta in 1 year's time:
0.858
Expected beta in 3 year's time:
1.213
Unlevered (debt free) Beta:
0.679
Beta in relation to Nasdaq (XNAS):
0.842
Beta in relation to all global stocks::
1.021
Beta Comparison & Analysis
Beta of competitors/peers::
1.37
Beta is -23.97% lower than peers
Average Industry Beta:
1.004
Beta is 3.76% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.29%
Sustainable growth rate is -85.91% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.000
Alpha is -101.68% below industry average alpha yield
Alpha is -2% below the market average
Analysis of Cost of Capital of
WRK
Equity cost of capital:
0.103
Equity cost of capital is 2.58% above industry mean WACC
Unlevered (without debt) cost of capital:
6.70%
Before-tax cost of debt:
4.88%
After-tax cost of debt:
3.85%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.85%
WACC is 27.24% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$79.60
Revenue growth rate per share of (3Y):
0.86
Annual revenue growth rate is 8.49% above the industry average
EPS:
$2.97
Expected Annual growth rate of EPS (3Y):
-1.08%
Expected future EPS growth rate is -111.68% lower than the Packaging & Containers industry
Free cash flow (FCF) per share:
$4.54
Balance sheet equity growth per share: -48.87%
Equity growth rate per share is -511.90% lower than the industry
Debt per share
$31.44
EBITDA per share
$11.38
Valuation Analysis Today of
WRK
P/E Ratio:
11.31
P/E Ratio of Competitors/Peers:
22.95
P/E ratio is -50.71% lower than main peers & is -42.48% lower than the industry
Stock price/value with industry average P/E ratio: $58.40
WRK is -32.13% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $16.91
Present value of the expected future dividends only: $7.06
P/S (Price to Sales ratio):
0.5
Price to sales ratio is -60.03% below the industry mean
P/B (Price to book value ratio):
0.86
Price to free cash flow: 8.73
Price to free cash flow ratio is -89.19% lower than the industry
Net income growth rate (3Y):
-57.60%
Net income growth rate is 111.25% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 8.33%
Dividend yeild: 2.50%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $0.99
Expected next dividend best case: $0.33
Expected next dividend worst case: $0.17
Average dividend payment (long-term): $0.27
Average dividend increase/decrease (growth rate) % per period: -3.28%
Expected next dividend payment date: 22/08/2022
Expected next dividend record date: 08/10/2022
Expected next dividend declaration date: 28/07/2022
Previous dividend payment date: 24/05/2022
Previous dividend record date: 05/12/2022
Previous dividend declaration date: 29/04/2022
Dividend History:
2022-05-11--$0.25
2021-11-09--$0.25
2021-05-18--$0.24
2022-02-10--$0.25
2021-08-12--$0.24
2021-02-10--$0.20
Dividend growth rate is -142.47% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
68.36%
Net debt to equity ratio:
67.90%
Debt to assets ratio:
27.50%
Net debt to assets ratio:
27.31%
Debt-to-asset ratio is -58.88% below industry average
Ability to repay debt:
Interest coverage ratio:
7.21
Interest coverage ratio is 28.24% more than industry average
Looking forward:
Debt growth rate:
-13.11%
Annual debt growth is 57% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.65%
Analysis of Key Statistics
Correlation of price movement with the market:
0.645
Statistical significance of correlation:
WRK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is 15.95% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
0.014
Covariance of price movement with the market:
0.025
Kurtosis
6.16
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.037
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WRK
Gross Profit Margin Ratio:
74%
Operating Profit Margin Ratio:
5.82%
Operating profit margin is -11.62% lower than the industry
Net Profit Margin Ratio:
74%
Effective Tax Rate:
21.80%
Effective tax rate is -39.63% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.81%
Return on equity (ROE) is -86.49% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.74%
Return on assets (ROA) is -47.36% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
1.57
Current ratio is -0.47% below industry average
Cash Conversion Cycle (days):
11.3
Cash conversion cycle is -82.29% below industry average
The remaining useful life of property plant & equipment is: 3.3 years
Stock based compensation to net income ratio:
1.91%
In-depth Efficiency Analysis
Revenue generated per employee:
405.6K
Each employee generates -87% less revenue than industry average revenue per employee
EBITDA generated per employee:
58.0K
Each employee generates -90% less EBITDA than industry average revenue per employee
Profit generated per employee:
16.0K
Each employee generates -94% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.6K
Each employee generates -110% less free cash flow than industry average revenue per employee
Assets/Capital per employee
471.2K
Each employee generates -110% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WRK
VAIL RESORTS, INC. (XNYS:MTN)
INTERCONTINENTAL HOTELS GROUP PLC (XNYS:IHG)
FLOOR & DECOR HOLDINGS, INC. (XNYS:FND)
BORGWARNER INC. (XNYS:BWA)
PACKAGING CORPORATION OF AMERICA (XNYS:PKG)
PULTEGROUP, INC. (XNYS:PHM)
LEAR CORPORATION (XNYS:LEA)
WILLIAMS-SONOMA, INC. (XNYS:WSM)
FORTUNE BRANDS HOME & SECURITY, INC. (XNYS:FBHS)
Current Analyst Ratings
Strong buy�21%
Buy�25%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
20.24B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
16.51B
3.73B
-
1.34B
1.83B
-
352.70M
2.18B
47.50M
401.70M
1.47B
2.89B
1.18B
796.00M
1.02B
223.00M
796.00M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
- 14000.00K
Stock Based Compensation :
15.20M
Change in Working Capital :
- 225800.00K
Accounts Receivables:
60.40M
Other Working Capital:
62.00M
Other Non-Cash Items:
295.10M
Net Cash Provided by Operating Activities:
252.80M
Investments in PP&E:
-
Net Acquisitions:
- 7000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
291.30M
-
291.30M
2.53B
2.24B
509.80M
5.57B
10.48B
5.96B
3.24B
-
-
3.84B
23.51B
-
29.08B
2.14B
236.80M
-
-
1.18B
3.56B
8.00B
2.88B
13.81B
-
17.37B
2.60M
1.71B
- 1012700.0K
11.00B
December 31, 2021 at 12:00:00 AM
18.69B
11.70B
29.06B
-
8.23B
7.9B
-
- 147800.00K
- 154800.00K
- 52200.00K
6.20M
- 100100.00K
- 66300.00K
108.10M
- 104300.00K
6.70M
400.00K
291.30M
290.90M
252.80M
- 173100.00K
79.70M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
WRK
2023
2024
2025
2026
2027
$51.67
$55.28
$59.15
$63.29
$67.72