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Kraton Corp (KRA) Stock Up 69% YTD: What's Driving It?
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Shares of Kraton Corporation have popped around 69% year to date. The chemical maker has also significantly outperformed its industry’s gain of roughly 8.6% to over the same time frame.
Kraton has a market cap of roughly $1.5 billion and average volume of shares traded in the last three months is around 304.7K.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping earnings performance in the first three quarters of 2017 and upbeat prospects have contributed to a rally in Kraton’s shares. The company delivered positive earnings surprise of 34.8%, 49.1% and 54.1% in the first, second and third quarter of 2017, respectively.
Kraton is benefiting from the acquisition of Arizona Chemical in the form of cost reduction and operational improvements. The company delivered cost improvement and transaction synergies worth $10.7 million in the last reported quarter.
Kraton also realized operational cost improvement and transaction synergies related to the Arizona Chemical acquisition of $65 million at the end of September 2017, well ahead of its initial year-end 2018 target. The company also expects to realize roughly $50 million of its $70 million cost reduction target for its Polymer segment by end-2017 with the balance is anticipated to be realized in 2018.
Moreover, Kraton remains committed to steer organic growth in key markets through state-of-the-art innovation and infrastructure. The company, in May, announced the opening of a hydrogenated styrenic block copolymer (HSBC) plant in Mailiao, Taiwan. The plant will boost the company’s innovation-grade business, especially low molecular weight HSBC products. It will also help Kraton to effectively serve the growing export and Asian markets through higher production capacity of varied grades of HSBC products.
Kraton should also gain from its efforts to reduce debt. The company cut its net debt by $87 million in the third quarter leveraging improved cash generation. It now plans to reduce net debt by $125-$150 million in 2017.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 115% year to date.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 81% year to date.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
Kraton Corp (KRA) Stock Up 69% YTD: What's Driving It?
Shares of Kraton Corporation have popped around 69% year to date. The chemical maker has also significantly outperformed its industry’s gain of roughly 8.6% to over the same time frame.
Kraton has a market cap of roughly $1.5 billion and average volume of shares traded in the last three months is around 304.7K.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Forecast-topping earnings performance in the first three quarters of 2017 and upbeat prospects have contributed to a rally in Kraton’s shares. The company delivered positive earnings surprise of 34.8%, 49.1% and 54.1% in the first, second and third quarter of 2017, respectively.
Kraton is benefiting from the acquisition of Arizona Chemical in the form of cost reduction and operational improvements. The company delivered cost improvement and transaction synergies worth $10.7 million in the last reported quarter.
Kraton also realized operational cost improvement and transaction synergies related to the Arizona Chemical acquisition of $65 million at the end of September 2017, well ahead of its initial year-end 2018 target. The company also expects to realize roughly $50 million of its $70 million cost reduction target for its Polymer segment by end-2017 with the balance is anticipated to be realized in 2018.
Moreover, Kraton remains committed to steer organic growth in key markets through state-of-the-art innovation and infrastructure. The company, in May, announced the opening of a hydrogenated styrenic block copolymer (HSBC) plant in Mailiao, Taiwan. The plant will boost the company’s innovation-grade business, especially low molecular weight HSBC products. It will also help Kraton to effectively serve the growing export and Asian markets through higher production capacity of varied grades of HSBC products.
Kraton should also gain from its efforts to reduce debt. The company cut its net debt by $87 million in the third quarter leveraging improved cash generation. It now plans to reduce net debt by $125-$150 million in 2017.
Kraton Corporation Price and Consensus
Kraton Corporation Price and Consensus | Kraton Corporation Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Koppers Holdings Inc. (KOP - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 115% year to date.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 81% year to date.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>