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Shares of Univar Solutions Inc. scaled a fresh 52-week high of $32.52 on Mar 15, before closing the session at $32.16.
The company, carrying a Zacks Rank #1 (Strong Buy), has a market cap of around $5.4 billion. It also has an expected long-term earnings per share growth rate of around 13%.
The stock has surged 50.4% in the past year against a 5.8% decline of the industry.
Image Source: Zacks Investment Research
What’s Driving UNVR?
Univar is benefiting from market share gains, operational execution, strategic acquisitions, cost minimization and a robust liquidity position. Better-than-expected earnings performance in the fourth quarter and an upbeat outlook also contributed to the rise in Univar’s shares.
Univar’s adjusted earnings of 60 cents per share in the fourth quarter topped the Zacks Consensus Estimate of 34 cents. The company stated that it expects adjusted EBITDA for first-quarter 2022 in the range of $260-$280 million. For 2022, adjusted EBITDA is forecast in the band of $860-$890 million, suggesting an increase from the previous year’s levels. The company also sees net free cash flow for 2022 in the range of $430-$445 million.
Univar is likely to gain from its market expansion and acquisition moves. UNVR is constantly seeking opportunities to enter new regions and reinforce its product and service portfolio. It is also strengthening end-market capabilities through strategic buyouts. UNVR’s acquisition of the Brazilian ingredients and specialty chemicals distributor Sweetmix Distribuidora de Materias Primas Industriais Ltda is anticipated to drive growth for its Food Ingredients portfolio in Brazil and generate growth and cost synergies. This will also springboard its Latin American expansion.
The acquisition of Nexeo Solutions also enhanced Univar’s capabilities and accelerated its ability to create a significant value for customers, supplier partners, employees and shareholders. Univar expects to achieve the targeted $120 million in annual net synergies from the Nexeo acquisition by early 2022.
Univar is committed to cost-cutting, expense management and productivity actions that are helping it minimize operational costs and boost margins. It is undertaking several measures to reduce costs in the wake of the pandemic, including a decline in travel and other discretionary spending.
Univar also has a solid liquidity position. At the end of fourth-quarter 2021, its liquidity was nearly $1 billion, including around $251.5 million cash-in-hand, and additional availability under committed, asset-based credit facilities. UNVR also expects strong liquidity and the majority of its debt obligations to mature in 2026 and beyond. Its long-term debt amounted to $2,223.5 million at the end of 2021, down 10% year over year.
Some other top-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Mosaic has a projected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 22.2% upward in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 72.5% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 30.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 25.1% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 23.6%. ASIX has surged 75.1% in a year. The company sports a Zacks Rank #1.
Allegheny, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 45.6% upward in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 19.8% over a year.
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Univar (UNVR) Stock Hits 52-Week High: What's Driving It?
Shares of Univar Solutions Inc. scaled a fresh 52-week high of $32.52 on Mar 15, before closing the session at $32.16.
The company, carrying a Zacks Rank #1 (Strong Buy), has a market cap of around $5.4 billion. It also has an expected long-term earnings per share growth rate of around 13%.
The stock has surged 50.4% in the past year against a 5.8% decline of the industry.
Image Source: Zacks Investment Research
What’s Driving UNVR?
Univar is benefiting from market share gains, operational execution, strategic acquisitions, cost minimization and a robust liquidity position. Better-than-expected earnings performance in the fourth quarter and an upbeat outlook also contributed to the rise in Univar’s shares.
Univar’s adjusted earnings of 60 cents per share in the fourth quarter topped the Zacks Consensus Estimate of 34 cents. The company stated that it expects adjusted EBITDA for first-quarter 2022 in the range of $260-$280 million. For 2022, adjusted EBITDA is forecast in the band of $860-$890 million, suggesting an increase from the previous year’s levels. The company also sees net free cash flow for 2022 in the range of $430-$445 million.
Univar is likely to gain from its market expansion and acquisition moves. UNVR is constantly seeking opportunities to enter new regions and reinforce its product and service portfolio. It is also strengthening end-market capabilities through strategic buyouts. UNVR’s acquisition of the Brazilian ingredients and specialty chemicals distributor Sweetmix Distribuidora de Materias Primas Industriais Ltda is anticipated to drive growth for its Food Ingredients portfolio in Brazil and generate growth and cost synergies. This will also springboard its Latin American expansion.
The acquisition of Nexeo Solutions also enhanced Univar’s capabilities and accelerated its ability to create a significant value for customers, supplier partners, employees and shareholders. Univar expects to achieve the targeted $120 million in annual net synergies from the Nexeo acquisition by early 2022.
Univar is committed to cost-cutting, expense management and productivity actions that are helping it minimize operational costs and boost margins. It is undertaking several measures to reduce costs in the wake of the pandemic, including a decline in travel and other discretionary spending.
Univar also has a solid liquidity position. At the end of fourth-quarter 2021, its liquidity was nearly $1 billion, including around $251.5 million cash-in-hand, and additional availability under committed, asset-based credit facilities. UNVR also expects strong liquidity and the majority of its debt obligations to mature in 2026 and beyond. Its long-term debt amounted to $2,223.5 million at the end of 2021, down 10% year over year.
Univar Solutions Inc. Price and Consensus
Univar Solutions Inc. price-consensus-chart | Univar Solutions Inc. Quote
Stocks to Consider
Some other top-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .
Mosaic has a projected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 22.2% upward in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 72.5% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 30.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 25.1% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 23.6%. ASIX has surged 75.1% in a year. The company sports a Zacks Rank #1.
Allegheny, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 45.6% upward in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 19.8% over a year.