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Why You Should Add Ashland (ASH) Stock to Your Portfolio

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Ashland Global Holdings Inc.’s (ASH - Free Report) stock looks promising at the moment. It is gaining from strong demand across its end markets and disciplined pricing actions.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.

Estimates Northbound

Over the past two months, the Zacks Consensus Estimate for Ashland for fiscal 2022 has increased around 12.1%. The consensus estimate for fourth-quarter fiscal 2022 has also been revised 6.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Healthy Growth Prospects

The Zacks Consensus Estimate for earnings for fiscal 2022 for Ashland is currently pegged at $5.66, reflecting an expected year-over-year growth of 50.9%. Moreover, earnings are expected to register a 14.8% growth in the fiscal fourth quarter.

Positive Earnings Surprise History

Ashland has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 1.8%, on average.

Growth Drivers in Place

Ashland is benefiting from strong demand in its end markets. Its industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company, in its fiscal third quarter call, noted that it sees underlying demand to remain strong for its focused ingredients and additives product portfolio in the near term. The company is also gaining from the contributions from the Schulke & Mayr acquisition.

The company expects sales in the range of $2.35-$2.4 billion for fiscal 2022, representing around 13% year-over-year growth at the mid-point. It also anticipates adjusted EBITDA between $580 million and $590 million, representing around 18% year-over-year growth at the mid-point.

Ashland’s restructuring actions have also provided it with a profitable, high-margin portfolio focused on high-quality markets and better positioned it for future growth. The company is also taking a number of actions including reduction of operating costs to boost profitability. Cost-reduction measures are expected to support its margins in fiscal 2022. The company’s pricing and mix improvement actions are also helping it to counter the current inflation.

Ashland also remains committed to boosting its cash flows and returning value to shareholders. The company remains focused on expanding margins and improving free cash flow conversion. ASH, in May 2022, raised its quarterly cash dividend by 12% to 33.5 cents per share. The company’s board also authorized a new, evergreen $500-million common stock repurchase program. The new authorization discontinues and replaces Ashland’s 2018 $1-billion share buyback program.

 

Ashland Inc. Price and Consensus

 

Ashland Inc. Price and Consensus

Ashland Inc. price-consensus-chart | Ashland Inc. Quote

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 425.7% for the current year. The consensus estimate for ALB's current-year earnings has been revised 67.9% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 27% in a year.

Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 20.7%. SQM has rallied roughly 89% in a year. The company presently carries a Zacks Rank #2.

Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 6.9% upward in the past 60 days.

Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 11% in a year and currently carries a Zacks Rank #2.

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