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Here's Why You Should Consider Buying Ferro (FOE) Stock
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We believe that Ferro Corporation is a solid choice for investors seeking exposure in the chemical space. The company’s strengthening segmental businesses as well as its strategic acquisitions and focus on innovation bode well. It currently has a market capitalization of $2 billion.
The stock has been upgraded to a Zacks Rank #1 (Strong Buy) on Nov 24.
Ferro reported better-than-expected results in the last four quarters, with an average positive earnings surprise of 17.79%. The company’s shares have yielded roughly 64% return in a year. Notably, the stock has rallied 3% in the last month, outperforming 1.6% gain of the industry.
Why the Upgrade?
Ferro’s third-quarter 2017 adjusted earnings per share grew 22.2% year over year while net sales increased 21.3% on the back of healthy growth in Color Solutions, Performance Colors & Glass and Performance Coatings segments sales. Organically, net sales grew 4.9%, on a constant currency basis.
We believe that Ferro is well placed to gain traction from its diversified product portfolio and focus on innovation. Also, it has a solid customer base in various end markets, including construction, automotive, electronics, industrial products, household furnishings and appliance. In the coming quarters, improving demand for lead-free enamel solutions in the automotive market and strengthening electronics business will be prime growth catalysts for the Performance Colors & Glass segment while rebuilding activities after the recent natural disasters and healthy demand for surface polishing technology will drive sales for the Color Solutions segment. Performance Coatings segment will gain from higher demand for its technologically advanced products in the appliance and other end markets.
Additionally, Ferro’s acquisitive nature has helped in business expansion over time. In August, the company acquired Israel-based Dip Tech Ltd., a provider of digital printing solutions for glass coatings. The assets are expected to enhance the company’s portfolio in the Performance Colors & Glass segment and boost earnings in 2018. Moreover, it acquired Spain-based Gardenia Quimica in August and completed acquiring Endeka Group in November. Both these buyouts will strengthen the company’s Performance Coatings segment’s offerings in the ceramic tile market.
For 2017, Ferro has increased its adjusted earnings per share forecast to a range of $1.26-$1.29 from the prior projection of $1.22-$1.27. Adjusted earnings before interest, tax, depreciation and amortization are now expected to be $228-$231 million versus $223-$228 expected earlier. Sales are now predicted to grow 17-17.5%, up from the previous projection of 12-13%.
The stocks’ earnings estimates for 2017 have been revised upward by five analysts while that for 2018 have been raised by three in the last 30 days. Currently, the Zacks Consensus Estimate for the stock stands at $1.29 for 2017 and $1.50 for 2018, representing 1.6% and 1.4% increase from their respective estimates 30 days ago.
Some other top-ranked stocks in the industry include Kraton Corporation , Ingevity Corporation (NGVT - Free Report) and International Flavors & Fragrances Inc. (IFF - Free Report) . While both Kraton and Ingevity sport a Zacks Rank of 1, International Flavors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kraton Corporation’s earnings estimates for 2017 and 2018 improved over the last 60 days. Also, the company pulled off an average positive earnings surprise of 32.88% in the trailing four quarters.
Ingevity Corporation delivered a positive average earnings surprise of 10.38% in the last four quarters. Its earnings estimates for 2017 and 2018 were revised upward over the past 60 days.
International Flavors & Fragrances witnessed upward earnings estimate revisions for 2017 and 2018, over the past 60 days. The company delivered an average positive earnings surprise of 3.05% in the trailing four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Here's Why You Should Consider Buying Ferro (FOE) Stock
We believe that Ferro Corporation is a solid choice for investors seeking exposure in the chemical space. The company’s strengthening segmental businesses as well as its strategic acquisitions and focus on innovation bode well. It currently has a market capitalization of $2 billion.
The stock has been upgraded to a Zacks Rank #1 (Strong Buy) on Nov 24.
Ferro reported better-than-expected results in the last four quarters, with an average positive earnings surprise of 17.79%. The company’s shares have yielded roughly 64% return in a year. Notably, the stock has rallied 3% in the last month, outperforming 1.6% gain of the industry.
Why the Upgrade?
Ferro’s third-quarter 2017 adjusted earnings per share grew 22.2% year over year while net sales increased 21.3% on the back of healthy growth in Color Solutions, Performance Colors & Glass and Performance Coatings segments sales. Organically, net sales grew 4.9%, on a constant currency basis.
We believe that Ferro is well placed to gain traction from its diversified product portfolio and focus on innovation. Also, it has a solid customer base in various end markets, including construction, automotive, electronics, industrial products, household furnishings and appliance. In the coming quarters, improving demand for lead-free enamel solutions in the automotive market and strengthening electronics business will be prime growth catalysts for the Performance Colors & Glass segment while rebuilding activities after the recent natural disasters and healthy demand for surface polishing technology will drive sales for the Color Solutions segment. Performance Coatings segment will gain from higher demand for its technologically advanced products in the appliance and other end markets.
Additionally, Ferro’s acquisitive nature has helped in business expansion over time. In August, the company acquired Israel-based Dip Tech Ltd., a provider of digital printing solutions for glass coatings. The assets are expected to enhance the company’s portfolio in the Performance Colors & Glass segment and boost earnings in 2018. Moreover, it acquired Spain-based Gardenia Quimica in August and completed acquiring Endeka Group in November. Both these buyouts will strengthen the company’s Performance Coatings segment’s offerings in the ceramic tile market.
For 2017, Ferro has increased its adjusted earnings per share forecast to a range of $1.26-$1.29 from the prior projection of $1.22-$1.27. Adjusted earnings before interest, tax, depreciation and amortization are now expected to be $228-$231 million versus $223-$228 expected earlier. Sales are now predicted to grow 17-17.5%, up from the previous projection of 12-13%.
The stocks’ earnings estimates for 2017 have been revised upward by five analysts while that for 2018 have been raised by three in the last 30 days. Currently, the Zacks Consensus Estimate for the stock stands at $1.29 for 2017 and $1.50 for 2018, representing 1.6% and 1.4% increase from their respective estimates 30 days ago.
Ferro Corporation Price and Consensus
Ferro Corporation Price and Consensus | Ferro Corporation Quote
Other Stocks to Consider
Some other top-ranked stocks in the industry include Kraton Corporation , Ingevity Corporation (NGVT - Free Report) and International Flavors & Fragrances Inc. (IFF - Free Report) . While both Kraton and Ingevity sport a Zacks Rank of 1, International Flavors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kraton Corporation’s earnings estimates for 2017 and 2018 improved over the last 60 days. Also, the company pulled off an average positive earnings surprise of 32.88% in the trailing four quarters.
Ingevity Corporation delivered a positive average earnings surprise of 10.38% in the last four quarters. Its earnings estimates for 2017 and 2018 were revised upward over the past 60 days.
International Flavors & Fragrances witnessed upward earnings estimate revisions for 2017 and 2018, over the past 60 days. The company delivered an average positive earnings surprise of 3.05% in the trailing four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>