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Kronos Worldwide, Inc.’s (KRO - Free Report) shares have shot up 58.6% over the past six months. The company has also outperformed its industry’s gain of 2.1% over the same time frame. Moreover, it has topped the S&P 500’s roughly 22.4% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Image Source: Zacks Investment Research
What’s Going in KRO’s Favor?
Forecast-topping earnings performance in the fourth quarter of 2023 and an upbeat outlook have contributed to the rally in the company's shares. Kronos Worldwide’s loss of 5 cents per share for the fourth quarter was narrower than the Zacks Consensus Estimate of a loss of 7 cents.
Net sales for the quarter rose around 17% year over year to $400.1 million on higher sales volumes driven by stronger demand for titanium dioxide (TiO2) in primary markets of Europe and North America, which more than offset lower average TiO2 selling prices.
KRO is well-placed to gain from higher demand for TiO2. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.
Kronos sees consumer demand to improve in 2024. It believes customer destocking of TiO2 is largely complete and customer inventories are historically low. KRO also sees the pricing pressure to be somewhat eased this year. It expects sales volumes to rise on a year-over-year basis in 2024.
The company has beefed up its production rates in sync with current and expected near-term demand improvement. It expects its production volumes in 2024 will be higher than the level witnessed in 2023.
KRO also envisions reduced energy costs along with its cost-cutting initiatives to result in improved margins on a year-over-year basis in 2024.
Other top-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Denison Mines Corp. (DNN - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.94, indicating a year-over-year surge of 245.6%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 60% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Denison Mines carries a Zacks Rank #1. DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared roughly 81% in the past year.
The Zacks Consensus Estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 74% in the past year.
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Kronos Worldwide (KRO) Shares Surge 59% in 6 Months: Here's Why
Kronos Worldwide, Inc.’s (KRO - Free Report) shares have shot up 58.6% over the past six months. The company has also outperformed its industry’s gain of 2.1% over the same time frame. Moreover, it has topped the S&P 500’s roughly 22.4% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Image Source: Zacks Investment Research
What’s Going in KRO’s Favor?
Forecast-topping earnings performance in the fourth quarter of 2023 and an upbeat outlook have contributed to the rally in the company's shares. Kronos Worldwide’s loss of 5 cents per share for the fourth quarter was narrower than the Zacks Consensus Estimate of a loss of 7 cents.
Net sales for the quarter rose around 17% year over year to $400.1 million on higher sales volumes driven by stronger demand for titanium dioxide (TiO2) in primary markets of Europe and North America, which more than offset lower average TiO2 selling prices.
KRO is well-placed to gain from higher demand for TiO2. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.
Kronos sees consumer demand to improve in 2024. It believes customer destocking of TiO2 is largely complete and customer inventories are historically low. KRO also sees the pricing pressure to be somewhat eased this year. It expects sales volumes to rise on a year-over-year basis in 2024.
The company has beefed up its production rates in sync with current and expected near-term demand improvement. It expects its production volumes in 2024 will be higher than the level witnessed in 2023.
KRO also envisions reduced energy costs along with its cost-cutting initiatives to result in improved margins on a year-over-year basis in 2024.
Kronos Worldwide Inc Price and Consensus
Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote
Stocks to Consider
Other top-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Denison Mines Corp. (DNN - Free Report) and Hawkins, Inc. (HWKN - Free Report) .
The Zacks Consensus Estimate for Carpenter Technology’s current fiscal year earnings is pegged at $3.94, indicating a year-over-year surge of 245.6%. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have gained around 60% in the past year. CRS currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Denison Mines carries a Zacks Rank #1. DNN beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 300%. The company’s shares have soared roughly 81% in the past year.
The Zacks Consensus Estimate for Hawkins’ current fiscal year earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% upward in the past 30 days. HWKN, a Zacks Rank #2 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 30.6%. The company’s shares have rallied roughly 74% in the past year.