Back to top

Image: Bigstock

Quaker Chemical (KWR) Up 41% in 6 Months: What's Driving It?

Read MoreHide Full Article

Quaker Chemical Corporation’s (KWR - Free Report) shares have rallied 40.8% over the past six months. The company has also outperformed its industry’s decline of 19.8% to over the same time frame.

Quaker Chemical, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $4.4 billion and average volume of shares traded in the last three months is around 81.1K.




Let’s take a look into the factors that are driving the stock’s price appreciation.

What’s Going in KWR’s Favor?

Forecast-topping earnings performance in the third quarter has contributed to the rally in the company's shares. Quaker Chemical 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 third quarter topped the Zacks Consensus Estimate of 88 cents. Net sales rose 13% year over year to $367.2 million and also surpassed the Zacks Consensus Estimate of $331.9 million.

Quaker Chemical benefited from a strong recovery in its business on a sequential comparison basis in the third quarter on 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 is expected to benefit from cost savings actions, integration synergies, improvement in product margins and healthy cash flows amid the challenging environment. Its combination with Houghton International, Inc and the acquisition of the operating divisions of Norman Hay plc are also expected to drive its revenues this year.

Moreover, earnings estimates for Quaker Chemical have been going up over the past two months. The Zacks Consensus Estimate for the current year has increased 23.6%. The consensus estimate for 2021 has also been revised 2.1% upward over the same time frame.


Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include BHP Group (BHP - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) and Pretium Resources Inc. (PVG - Free Report) .

BHP Group has a projected earnings growth rate of 31.3% for the current fiscal year. The company’s shares have gained around 8% in a year. It currently sports a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 18% 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 10% in the past year. It currently carries a Zacks Rank #2.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.  

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>