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Innospec's (IOSP) Stock Rallies 14% in 3 Months: Here's Why
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Innospec Inc.’s (IOSP - Free Report) shares have gained 13.6% in the past three months. The company also outperformed the industry’s rise of 0.8% over the same time frame. It has also topped the S&P 500’s nearly 11.3% rise over the same period.
Image Source: Zacks Investment Research
Let’s take a look at the factors behind the stock’s price appreciation.
Strategic Expansion and QGP Acquisition Fuel Optimism
Innospec, currently carrying Zacks rank #2 (Buy), is experiencing significant benefits from the strength of its Oilfield Services unit and strategic growth initiatives. The company is committed to technology development and enhancing margins to fuel organic growth across its diversified business portfolio.
IOSP’s adjusted earnings per share were at $1.84 in the fourth quarter, up from $1.20 per share a year ago and surpassing the Zacks Consensus Estimate of $1.59. Despite a 3% decline in revenues to $494.7 million from the previous year’s levels, Innospec exceeded the Zacks Consensus Estimate of $474 million. The Oilfield Services unit continued to deliver strong results, while the Performance Chemicals and Fuel Specialties segments recorded double-digit operating income growth and margin expansion.
The recent acquisition of QGP Quimica Geral in Brazil expands Innospec's global presence and enhances its manufacturing capabilities and customer service in South America. QGP's expertise in specialty chemistries, particularly in growing markets like Agriculture, complements Innospec's portfolio. This acquisition aligns with Innospec's M&A strategy, strengthening the Performance Chemicals segment and establishing a manufacturing foothold in South America. Innospec emphasized its debt-free balance sheet post-acquisition, positioning itself for future M&A activities, shareholder returns and strategic organic growth investments.
Innospec expressed optimism for 2024 despite anticipated economic challenges. The company highlighted its expanding pipeline of technology-driven organic opportunities and the integration of the QGP acquisition as key drivers of growth. Investment in capacity expansion is expected to unlock further growth prospects, with new contracts in personal care fueling the Performance Chemicals division and advancements in technologies benefiting the Fuel Specialties unit.
Givaudan's projected earnings growth rate for the current year is 13.43%. The Zacks Consensus Estimate for GVDNY’s current-year earnings has been revised upward by 5.1% in the past 60 days. The company’s shares have rallied 49.4% in the past year.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have increased 44.7% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a 26% year-over-year rise. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 70.6%. The company’s shares have surged 75.1% in the past year.
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Innospec's (IOSP) Stock Rallies 14% in 3 Months: Here's Why
Innospec Inc.’s (IOSP - Free Report) shares have gained 13.6% in the past three months. The company also outperformed the industry’s rise of 0.8% over the same time frame. It has also topped the S&P 500’s nearly 11.3% rise over the same period.
Image Source: Zacks Investment Research
Let’s take a look at the factors behind the stock’s price appreciation.
Strategic Expansion and QGP Acquisition Fuel Optimism
Innospec, currently carrying Zacks rank #2 (Buy), is experiencing significant benefits from the strength of its Oilfield Services unit and strategic growth initiatives. The company is committed to technology development and enhancing margins to fuel organic growth across its diversified business portfolio.
IOSP’s adjusted earnings per share were at $1.84 in the fourth quarter, up from $1.20 per share a year ago and surpassing the Zacks Consensus Estimate of $1.59. Despite a 3% decline in revenues to $494.7 million from the previous year’s levels, Innospec exceeded the Zacks Consensus Estimate of $474 million. The Oilfield Services unit continued to deliver strong results, while the Performance Chemicals and Fuel Specialties segments recorded double-digit operating income growth and margin expansion.
The recent acquisition of QGP Quimica Geral in Brazil expands Innospec's global presence and enhances its manufacturing capabilities and customer service in South America. QGP's expertise in specialty chemistries, particularly in growing markets like Agriculture, complements Innospec's portfolio. This acquisition aligns with Innospec's M&A strategy, strengthening the Performance Chemicals segment and establishing a manufacturing foothold in South America. Innospec emphasized its debt-free balance sheet post-acquisition, positioning itself for future M&A activities, shareholder returns and strategic organic growth investments.
Innospec expressed optimism for 2024 despite anticipated economic challenges. The company highlighted its expanding pipeline of technology-driven organic opportunities and the integration of the QGP acquisition as key drivers of growth. Investment in capacity expansion is expected to unlock further growth prospects, with new contracts in personal care fueling the Performance Chemicals division and advancements in technologies benefiting the Fuel Specialties unit.
Innospec Inc. Price and Consensus
Innospec Inc. price-consensus-chart | Innospec Inc. Quote
Other Stocks to Consider
Some other top-ranked stocks in the Basic Materials space are Givaudan SA (GVDNY - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Givaudan's projected earnings growth rate for the current year is 13.43%. The Zacks Consensus Estimate for GVDNY’s current-year earnings has been revised upward by 5.1% in the past 60 days. The company’s shares have rallied 49.4% in the past year.
The consensus estimate for CRS’ current fiscal year earnings is pegged at $3.97 per share, indicating a year-over-year surge of 248.3%. CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have increased 44.7% in the past year.
The consensus estimate for HWKN’s current fiscal year earnings is pegged at $3.61 per share, indicating a 26% year-over-year rise. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised upward by 4.3% in the past 30 days. HWKN beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 70.6%. The company’s shares have surged 75.1% in the past year.