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Ingevity (NGVT) Up 12% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Ingevity (NGVT - Free Report) . Shares have added about 12% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ingevity due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ingevity Tops Earnings and Sales Estimates in Q3

Ingevity reported profits of $69.9 million or $1.69 per share in third-quarter 2020, up from $59.9 million or $1.41 per share a year ago.

Adjusted earnings per share for the reported quarter were $1.79, topping the Zacks Consensus Estimate of 98 cents.

The company’s revenues fell around 8% year over year to $331.7 million as a strong rebound in automotive was offset by weak demand in engineered polymers, industrial specialties and oilfield applications due to the impacts of the coronavirus pandemic. However, the top line surpassed the Zacks Consensus Estimate of $310.8 million.

Adjusted EBITDA rose 12% year over year to $127.6 million in the quarter.

Segment Review

Revenues from the Performance Chemicals division declined 18% year over year to $187.9 million in the quarter. Softened demand in Engineered Polymers, Industrial Specialties and Oilfield Technologies was partly offset by strength in Pavement Technologies.

Revenues from the Performance Materials unit rose 10% to $143.8 million. Sales were driven by a strong recovery in automotive in the United States and Canada in North America and continued strong demand in China.

Balance Sheet

Ingevity ended the quarter with cash and cash equivalents of $198.2 million, up 162% year over year. Long-term debt was $1,277 million, down 1% year over year.


The company expects sales for 2020 of between $1.15 billion and $1.2 billion. It also anticipates adjusted EBITDA of $355-$365 million for the year. The company also expects free cash flows of $175 million for the full year.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -20.86% due to these changes.

VGM Scores

Currently, Ingevity has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ingevity has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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