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Ingevity (NGVT) Up 26% in 3 Months: What's Behind the Rally?
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Shares of Ingevity Corporation (NGVT - Free Report) have popped roughly 26% in the past three months against the industry’s rise of roughly 1.8%.
The company has a market cap of roughly $4.2 billion and average volume of shares traded in the last three months was around 234.3K. It has an expected long-term earnings per share growth rate of 12%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
What’s Driving NGVT?
Forecast-topping second-quarter earnings performance, upbeat outlook and solid growth prospects are contributing to the rally in Ingevity’s shares.
Ingevity logged a profit of $46.7 million or $1.10 per share in second-quarter 2018, surging roughly 45% year over year. Adjusted earnings of $1.12 per share exceeded the Zacks Consensus Estimate of 99 cents.
The company’s revenues rose roughly 19% year over year to $308.6 million in the quarter, squeaking past the Zacks Consensus Estimate of $308.2 million.
Ingevity gained from strong organic growth, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution and strong productivity.
Ingevity, in its second-quarter call, said that it remains optimistic about 2018 as it is witnessing the benefits of improving market conditions for its basic materials and high-value added technologies. The company increased the mid-point and narrowed the range for its 2018 guidance for adjusted EBITDA to $302-$314 million from $293-$307 million. The company also backed its sales guidance of between $1.10 billion and $1.13 billion for the year.
The company is well poised to gain from its buyout of Georgia-Pacific’s pine chemicals business. The acquisition contributed to strong growth in sales of the Performance Chemicals division in the second quarter. The unit should also benefit from higher adoption of tall oil fatty acid (TOFA)-based products.
Annual estimates for Ingevity have also moved north over the past month, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 7.5% to $3.72 per share. The Zacks Consensus Estimate for 2019 has also moved up 13.6% over the same timeframe to $4.67.
Other top-ranked stocks worth considering in the basic materials space include Celanese Corporation (CE - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1. The company’s shares have rallied around 23% in a year.
Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2 (Buy). Its shares have gained roughly 14% over a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Ingevity (NGVT) Up 26% in 3 Months: What's Behind the Rally?
Shares of Ingevity Corporation (NGVT - Free Report) have popped roughly 26% in the past three months against the industry’s rise of roughly 1.8%.
The company has a market cap of roughly $4.2 billion and average volume of shares traded in the last three months was around 234.3K. It has an expected long-term earnings per share growth rate of 12%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
What’s Driving NGVT?
Forecast-topping second-quarter earnings performance, upbeat outlook and solid growth prospects are contributing to the rally in Ingevity’s shares.
Ingevity logged a profit of $46.7 million or $1.10 per share in second-quarter 2018, surging roughly 45% year over year. Adjusted earnings of $1.12 per share exceeded the Zacks Consensus Estimate of 99 cents.
The company’s revenues rose roughly 19% year over year to $308.6 million in the quarter, squeaking past the Zacks Consensus Estimate of $308.2 million.
Ingevity gained from strong organic growth, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution and strong productivity.
Ingevity, in its second-quarter call, said that it remains optimistic about 2018 as it is witnessing the benefits of improving market conditions for its basic materials and high-value added technologies. The company increased the mid-point and narrowed the range for its 2018 guidance for adjusted EBITDA to $302-$314 million from $293-$307 million. The company also backed its sales guidance of between $1.10 billion and $1.13 billion for the year.
The company is well poised to gain from its buyout of Georgia-Pacific’s pine chemicals business. The acquisition contributed to strong growth in sales of the Performance Chemicals division in the second quarter. The unit should also benefit from higher adoption of tall oil fatty acid (TOFA)-based products.
Annual estimates for Ingevity have also moved north over the past month, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2018 has increased by around 7.5% to $3.72 per share. The Zacks Consensus Estimate for 2019 has also moved up 13.6% over the same timeframe to $4.67.
Ingevity Corporation Price and Consensus
Ingevity Corporation Price and Consensus | Ingevity Corporation Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Celanese Corporation (CE - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1. The company’s shares have gained around 19% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1. The company’s shares have rallied around 23% in a year.
Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2 (Buy). Its shares have gained roughly 14% over a year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>