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Why You Should Keep Ingevity (NGVT) Stock in Your Portfolio
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Ingevity Corporation (NGVT - Free Report) is expected to benefit from strong demand in its industrial specialties and engineered polymers businesses, higher prices and its actions to drive growth amid headwinds from cost inflation.
The company’s shares are up 16.7% over a year, compared with the 5.6% decline of its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
What’s Favoring the Stock?
Ingevity is gaining from a recovery in demand for its products from the pandemic-induced slowdown. The company’s Performance Chemicals segment is riding on solid demand as well as higher selling prices. It is seeing strong demand in engineered polymers and industrial specialties. Improved global automotive production is also expected to support results in the Performance Materials unit in 2023. Strong demand is expected to continue to drive NGVT’s top line moving ahead.
Ingevity is also taking a number of actions to drive long-term growth. It remains committed to invest organically. The company also remains focused on optimizing its operations and inventory to provide outstanding service to customers. It is also taking price hike actions to mitigate cost inflation. Ingevity is also committed to capturing the maximum value for its products.
The acquisition of Ozark Materials also strengthens the company’s position in the paving construction industry and enables it to better serve its customers. Ozark Materials is a leading manufacturer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints and preformed thermoplastics.
The company’s $60 million investment to buy an equity stake in Nexeon Limited also establishes its presence in the electric vehicle (EV) market along with providing opportunities to expand its activated carbon business. The investment includes a commitment to jointly develop technology for EVs using Ingevity’s activated carbon to improve the performance of lithium-ion batteries.
A Few Headwinds
Ingevity is exposed to costs-related headwinds as witnessed in the fourth quarter of 2022. Higher raw material costs and energy inflation are affecting its results. Raw material inflation is expected to continue over the near term due to persistent supply-chain issues. As such, higher input costs are likely to weigh on NGVT's bottom line.
Higher logistics costs due to disruptions in supply chains are another concern. Moreover, high energy cost across Europe weighed on margins in the company’s engineered polymers business for the most part of 2022. Elevated energy costs are likely to continue to impact profitability in this business in the first quarter of 2023.
Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Linde plc (LIN - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 32.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has gained around 26% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 33.1% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 31% in a year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 14% in the past year.
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Why You Should Keep Ingevity (NGVT) Stock in Your Portfolio
Ingevity Corporation (NGVT - Free Report) is expected to benefit from strong demand in its industrial specialties and engineered polymers businesses, higher prices and its actions to drive growth amid headwinds from cost inflation.
The company’s shares are up 16.7% over a year, compared with the 5.6% decline of its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
What’s Favoring the Stock?
Ingevity is gaining from a recovery in demand for its products from the pandemic-induced slowdown. The company’s Performance Chemicals segment is riding on solid demand as well as higher selling prices. It is seeing strong demand in engineered polymers and industrial specialties. Improved global automotive production is also expected to support results in the Performance Materials unit in 2023. Strong demand is expected to continue to drive NGVT’s top line moving ahead.
Ingevity is also taking a number of actions to drive long-term growth. It remains committed to invest organically. The company also remains focused on optimizing its operations and inventory to provide outstanding service to customers. It is also taking price hike actions to mitigate cost inflation. Ingevity is also committed to capturing the maximum value for its products.
The acquisition of Ozark Materials also strengthens the company’s position in the paving construction industry and enables it to better serve its customers. Ozark Materials is a leading manufacturer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints and preformed thermoplastics.
The company’s $60 million investment to buy an equity stake in Nexeon Limited also establishes its presence in the electric vehicle (EV) market along with providing opportunities to expand its activated carbon business. The investment includes a commitment to jointly develop technology for EVs using Ingevity’s activated carbon to improve the performance of lithium-ion batteries.
A Few Headwinds
Ingevity is exposed to costs-related headwinds as witnessed in the fourth quarter of 2022. Higher raw material costs and energy inflation are affecting its results. Raw material inflation is expected to continue over the near term due to persistent supply-chain issues. As such, higher input costs are likely to weigh on NGVT's bottom line.
Higher logistics costs due to disruptions in supply chains are another concern. Moreover, high energy cost across Europe weighed on margins in the company’s engineered polymers business for the most part of 2022. Elevated energy costs are likely to continue to impact profitability in this business in the first quarter of 2023.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Linde plc (LIN - Free Report) .
Steel Dynamics currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for STLD's current-year earnings has been revised 32.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.3%, on average. STLD has gained around 26% in a year.
Olympic Steel currently sports a Zacks Rank #1. The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 33.1% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 26.2%, on average. ZEUS has rallied around 31% in a year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 5.9% on average. LIN’s shares have gained roughly 14% in the past year.