Western Midstream (WES) Falls More Steeply Than Broader Market: What Investors Need to Know

Western Midstream (WES) closed at $48.19 in the latest trading session, marking a -2.23% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.59%. On the other hand, the Dow registered a loss of 0.6%, and the technology-centric Nasdaq decreased by 0.65%.

The oil and gas transportation and storage company's stock has climbed by 2.33% in the past month, falling short of the Oils-Energy sector's gain of 9.15% and outpacing the S&P 500's loss of 1.37%.

Market participants will be closely following the financial results of Western Midstream in its upcoming release. In that report, analysts expect Western Midstream to post earnings of $0.89 per share. This would mark year-over-year growth of 2.3%. Our most recent consensus estimate is calling for quarterly revenue of $1.2 billion, up 25.52% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.66 per share and revenue of $4.67 billion, which would represent changes of +22.82% and +21.47%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Western Midstream. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.01% increase. Currently, Western Midstream is carrying a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Western Midstream is at present trading with a Forward P/E ratio of 13.45. This indicates a premium in contrast to its industry's Forward P/E of 12.83.

Investors should also note that WES has a PEG ratio of 1.45 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. WES's industry had an average PEG ratio of 1.45 as of yesterday's close.

The Oil and Gas - Refining and Marketing - Master Limited Partnerships industry is part of the Oils-Energy sector. At present, this industry carries a Zacks Industry Rank of 7, placing it within the top 3% of over 250 industries.

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

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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