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Kronos Worldwide, Inc.’s (KRO - Free Report) shares have popped 29.4% over the past three months. The company has also outperformed its industry’s gain of 1.6% over the same time frame. Moreover, it has topped the S&P 500’s roughly 9.6% rise over the same period.
Let’s dive into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Driving KRO?
Strong fourth-quarter results 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 jumped 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.
The company expects consumer demand to improve in 2024. It believes customer destocking of TiO2 is largely complete and customer inventories are historically low. KRO also anticipates the pricing pressure to be somewhat eased this year. It expects sales volumes to rise on a year-over-year basis in 2024.
Kronos also envisions reduced energy costs along with its cost-cutting initiatives to result in improved margins on a year-over-year basis in 2024. It has boosted 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.
Earnings estimates for Kronos have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2024 has shot up around 312.5%. The consensus estimate for first-quarter 2024 has also been revised roughly 166.7% upward over the same time frame.
The Zacks Consensus Estimate for earnings for 2024 for Kronos is currently pegged at 33 cents, reflecting an expected year-over-year growth of 176.7%. Moreover, earnings are expected to register a 130.8% growth in first-quarter 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 Innospec Inc. (IOSP - 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 85% 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 106% in the past year.
The consensus estimate for Innospec’s current-year earnings is pegged at $6.72 per share, indicating a 10.3% year-over-year rise. IOSP, carrying a Zacks Rank #2, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 10.5%. The company’s shares have gained 18% in the past year.
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Kronos Worldwide (KRO) Shares Rally 29% in 3 Months: Here's Why
Kronos Worldwide, Inc.’s (KRO - Free Report) shares have popped 29.4% over the past three months. The company has also outperformed its industry’s gain of 1.6% over the same time frame. Moreover, it has topped the S&P 500’s roughly 9.6% rise over the same period.
Let’s dive into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Driving KRO?
Strong fourth-quarter results 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 jumped 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.
The company expects consumer demand to improve in 2024. It believes customer destocking of TiO2 is largely complete and customer inventories are historically low. KRO also anticipates the pricing pressure to be somewhat eased this year. It expects sales volumes to rise on a year-over-year basis in 2024.
Kronos also envisions reduced energy costs along with its cost-cutting initiatives to result in improved margins on a year-over-year basis in 2024. It has boosted 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.
Earnings estimates for Kronos have also been going up over the past two months, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2024 has shot up around 312.5%. The consensus estimate for first-quarter 2024 has also been revised roughly 166.7% upward over the same time frame.
The Zacks Consensus Estimate for earnings for 2024 for Kronos is currently pegged at 33 cents, reflecting an expected year-over-year growth of 176.7%. Moreover, earnings are expected to register a 130.8% growth in first-quarter 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 Innospec Inc. (IOSP - 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 85% 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 106% in the past year.
The consensus estimate for Innospec’s current-year earnings is pegged at $6.72 per share, indicating a 10.3% year-over-year rise. IOSP, carrying a Zacks Rank #2, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 10.5%. The company’s shares have gained 18% in the past year.