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Ashland (ASH) Up 13% in 3 Months: What's Driving the Stock?
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Ashland Inc.’s (ASH - Free Report) shares have gained 13.4% over the past three months. The company has also outperformed its industry’s rise of 7.4% over the same time frame. It has also topped the S&P 500’s 7.3% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
What’s Aiding ASH?
Ashland’s restructuring actions have provided it with a profitable, high-margin portfolio focused on high-quality markets and better positioned it for future growth. It is benefiting from solid demand in most consumer end markets. The company’s industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company is also gaining from the contributions from the Schulke & Mayr acquisition.
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 2023. The company’s pricing measures are also contributing to its top line growth. Its pricing and mix improvement actions are expected to cover the current inflation.
Ashland’s sales rose 7% year over year in the last reported quarter, driven by disciplined pricing actions leading to a recovery in costs in a high-inflation environment as well as better product mix. The company witnessed sales growth across its segments in the quarter.
The company also remains committed to boosting its cash flows and returning value to shareholders. It remains focused on expanding margins and improving free cash flow conversion. It generated cash flows from operating activities of $179 million in the last reported quarter, up around 19% year over year. The company, in May 2022, raised its quarterly cash dividend by 12% to 33.5 cents per share. Its board also authorized a new, evergreen $500-million common stock repurchase program.
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 1.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 76% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 19.4% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 48% in a year.
Nucor currently carries a Zacks Rank #1. The company has a projected earnings growth rate of 21.5% for the current year.
Nucor’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 3.9%, on average. NUE has rallied roughly 52% in a year.
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Ashland (ASH) Up 13% in 3 Months: What's Driving the Stock?
Ashland Inc.’s (ASH - Free Report) shares have gained 13.4% over the past three months. The company has also outperformed its industry’s rise of 7.4% over the same time frame. It has also topped the S&P 500’s 7.3% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
What’s Aiding ASH?
Ashland’s restructuring actions have provided it with a profitable, high-margin portfolio focused on high-quality markets and better positioned it for future growth. It is benefiting from solid demand in most consumer end markets. The company’s industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company is also gaining from the contributions from the Schulke & Mayr acquisition.
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 2023. The company’s pricing measures are also contributing to its top line growth. Its pricing and mix improvement actions are expected to cover the current inflation.
Ashland’s sales rose 7% year over year in the last reported quarter, driven by disciplined pricing actions leading to a recovery in costs in a high-inflation environment as well as better product mix. The company witnessed sales growth across its segments in the quarter.
The company also remains committed to boosting its cash flows and returning value to shareholders. It remains focused on expanding margins and improving free cash flow conversion. It generated cash flows from operating activities of $179 million in the last reported quarter, up around 19% year over year. The company, in May 2022, raised its quarterly cash dividend by 12% to 33.5 cents per share. Its board also authorized a new, evergreen $500-million common stock repurchase program.
Ashland Inc. Price and Consensus
Ashland Inc. price-consensus-chart | Ashland Inc. Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Commercial Metals Company (CMC - Free Report) and Nucor Corporation (NUE - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 1.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 76% in a year.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 19.4% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 16.7%, on average. CMC has gained around 48% in a year.
Nucor currently carries a Zacks Rank #1. The company has a projected earnings growth rate of 21.5% for the current year.
Nucor’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 3.9%, on average. NUE has rallied roughly 52% in a year.