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Ingevity (NGVT) Up 0.1% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Ingevity (NGVT - Free Report) . Shares have added about 0.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Ingevity's Earnings and Sales Top Estimates in Q2

Ingevity recorded profits of $59.8 million or $1.54 per share in second-quarter 2022, up from a profit of $44.3 million or $1.10 in the year-ago quarter.

Excluding one-time items, adjusted earnings in the quarter were $1.73 per share, up from $155 a year ago. The figure topped the Zacks Consensus Estimate of $1.68.

The company’s revenues rose around 17% year over year to a record $419.9 million in the quarter, beating the Zacks Consensus Estimate of $406.5 million. It benefited from actions to increase prices, which helped it offset inflationary cost pressures.

Segment Review

The Performance Chemicals division generated revenues of $297.5 million in the reported quarter, rising around 28% year over year. Sales rose around 21% in Engineered Polymers while sales in Industrial Specialties went up roughly 38%.

Revenues in the Performance Materials unit fell around 3% year over year to $122.4 million. Sales of activated carbon products were hurt by reduced automotive production due to the pandemic-related shutdowns in China and its impacts across the rest of the Asia-Pacific region.

Financials

Ingevity ended the quarter with cash and cash equivalents of $131.3 million, down around 44% year over year. Long-term debt was $1,176.2 million, down roughly 7% year over year.

Operating cash flow was $90.5 million for the reported quarter, up around 38% year over year.

Outlook

The company reaffirmed its sales guidance for 2022 in the band of $1.525-$1.65 billion and adjusted EBITDA outlook in the range of $430-$470 million.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Ingevity has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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.

Performance of an Industry Player

Ingevity is part of the Zacks Chemical - Specialty industry. Over the past month, Celanese (CE - Free Report) , a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended June 2022 more than a month ago.

Celanese reported revenues of $2.49 billion in the last reported quarter, representing a year-over-year change of +13.1%. EPS of $4.99 for the same period compares with $5.02 a year ago.

For the current quarter, Celanese is expected to post earnings of $4.17 per share, indicating a change of -13.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Celanese. Also, the stock has a VGM Score of A.


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