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Quaker Chemical (KWR) Stock Up 29% in 3 Months: Here's Why

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Quaker Chemical Corporation’s (KWR - Free Report) shares have shot up 29.3% over the past three months. The company has also outperformed its industry’s rise of 13.6% to over the same time frame.

Quaker Chemical, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $4.5 billion and average volume of shares traded in the last three months is around 76.6K.


 

 

Let’s delve deeper into the factors behind the stock’s price appreciation.

What’s Driving the Rally?

Shares of Quaker Chemical have been on an upswing since the company came up with its third-quarter 2020 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

The Pennsylvania-based company swung to a profit of $27.3 million or $1.53 per share in the third quarter from a loss of $13.1 million or 80 cents a year ago.

Adjusted earnings of $1.56 per share for the quarter trounced the Zacks Consensus Estimate of 88 cents. Net sales rose 13% year over year to $367.2 million and also topped the Zacks Consensus Estimate of $331.9 million.

Notably, the company has surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 50.3%.

Quaker Chemical witnessed a strong recovery in its business on a sequential comparison basis in the third quarter on the back of an improvement in its end-use markets. The company, in its third-quarter call, said that it expects gradual sequential improvement in its end markets as it progresses through the next two years.  It now expects full-year 2020 adjusted EBITDA to be more than $215 million.  

The company's combination with Houghton International, Inc and the acquisition of the operating divisions of Norman Hay plc are expected to drive its top line in 2020. It is also expected to benefit from cost savings actions, integration synergies, improvement in product margins and healthy cash flows amid the challenging environment.

Moreover, earnings estimates for Quaker Chemical have been going up over the past month. The Zacks Consensus Estimate for the current year has increased 21%. The consensus estimate for 2021 has also been revised 2.9% upward over the same time frame.

 

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited (AEM - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and Pretium Resources Inc. (PVG - Free Report) .

Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 14% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has an expected earnings growth rate of 115.7% for the current year. The company’s shares have surged around 44% in the past year. It currently carries a Zacks Rank #2.

Pretium Resources has an expected earnings growth rate of 25.5% for the current year. The company’s shares have gained around 22% in the past year. It currently carries a Zacks Rank #2.

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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