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Univar (UNVR) Stock Up 28% YTD: What's Driving the Rally?
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Univar Solutions Inc.’s shares have shot up 27.9% so far this year. The company has also outperformed its industry’s rise of 10.2% over the same time frame. Moreover, it has topped the S&P 500’s 15% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #1 (Strong Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Favoring UNVR?
Univar is benefiting from higher demand for products in its industrial solutions business. It saw strong demand in construction, automotive and general coatings in the first quarter. Strong demand in beauty and personal care business in North America also led to a double-digit sales growth in its consumer solutions business in the quarter.
The company, in its first-quarter call, said that it expects an improvement in volumes on the reopening of the North America and European economies. It sees demand to remain robust in its focused markets in the second quarter. It also now expects adjusted EBITDA for 2021 to be $680-$700 million, up from the prior view of $630-$650 million.
Moreover, Univar remains focused on cost-cutting, expense management and productivity actions, which are helping the company minimize operational costs and boost margins. It is taking a number of actions to reduce costs in the wake of the coronavirus pandemic, including reduction in travel and other discretionary spending.
The company is also progressing well with the integration of the Nexeo acquisition. The company expects to achieve annual net synergy from Nexeo of $120 million by early 2022.
Univar is also expected to gain from chemical price inflation due to disruption in the supply chain. Univar saw higher gross margins across all segments in the first quarter, partly driven by price inflation. It expects to continue to benefit from chemical price inflation in the second quarter amid persistent supply chain disruptions.
Earnings estimates for Univar have also been going up over the past three months. The Zacks Consensus Estimate for 2021 has increased around 27.1% while the same for second-quarter 2021 has gone up 16.3%.
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 386.2% for the current year. The company’s shares have surged around 134% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal has an expected earnings growth rate of 1,229.9% for the current year. The company’s shares have surged around 178% in the past year. It currently carries a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged roughly 56% in the past year. It currently flaunts a Zacks Rank #1.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Univar (UNVR) Stock Up 28% YTD: What's Driving the Rally?
Univar Solutions Inc.’s shares have shot up 27.9% so far this year. The company has also outperformed its industry’s rise of 10.2% over the same time frame. Moreover, it has topped the S&P 500’s 15% rise over the same period.
Let’s take a look into the factors behind this Zacks Rank #1 (Strong Buy) stock’s price appreciation.
What’s Favoring UNVR?
Univar is benefiting from higher demand for products in its industrial solutions business. It saw strong demand in construction, automotive and general coatings in the first quarter. Strong demand in beauty and personal care business in North America also led to a double-digit sales growth in its consumer solutions business in the quarter.
The company, in its first-quarter call, said that it expects an improvement in volumes on the reopening of the North America and European economies. It sees demand to remain robust in its focused markets in the second quarter. It also now expects adjusted EBITDA for 2021 to be $680-$700 million, up from the prior view of $630-$650 million.
Moreover, Univar remains focused on cost-cutting, expense management and productivity actions, which are helping the company minimize operational costs and boost margins. It is taking a number of actions to reduce costs in the wake of the coronavirus pandemic, including reduction in travel and other discretionary spending.
The company is also progressing well with the integration of the Nexeo acquisition. The company expects to achieve annual net synergy from Nexeo of $120 million by early 2022.
Univar is also expected to gain from chemical price inflation due to disruption in the supply chain. Univar saw higher gross margins across all segments in the first quarter, partly driven by price inflation. It expects to continue to benefit from chemical price inflation in the second quarter amid persistent supply chain disruptions.
Earnings estimates for Univar have also been going up over the past three months. The Zacks Consensus Estimate for 2021 has increased around 27.1% while the same for second-quarter 2021 has gone up 16.3%.
Univar Solutions Inc. Price and Consensus
Univar Solutions Inc. price-consensus-chart | Univar Solutions Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 386.2% for the current year. The company’s shares have surged around 134% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal has an expected earnings growth rate of 1,229.9% for the current year. The company’s shares have surged around 178% in the past year. It currently carries a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged roughly 56% in the past year. It currently flaunts a Zacks Rank #1.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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