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Ingevity's (NGVT) Growth Potential Solid on Rising Demand
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We believe that Ingevity Corporation (NGVT - Free Report) is a solid choice for investors seeking exposure in the chemical space. The company is well-positioned to leverage benefits from products offered under its Performance Materials and Performance Chemicals segments.
The stock was upgraded to a Zacks Rank #1 (Strong Buy) on Feb 23. It currently has a market capitalization of approximately $3.4 billion.
Ingevity has reported better-than-expected earnings in the last four quarters, pulling off an average positive earnings surprise of 13.30%. Notably, the company’s shares have rallied 6.5% in the last three years, outperforming 3.3% decline of the industry.
Why the Upgrade?
Ingevity’s bottom-line results for fourth-quarter 2017 surpassed the Zacks Consensus Estimate by 25% and increased 32.4% on a year-over-year basis. Net sales were up 8.8% on the back of 17.7% sales growth in Performance Materials segment and 3.7% increase in Performance Chemicals segment’s sales.
For 2018, Ingevity anticipates that its Performance Chemicals segment will benefit from oilfield recovery, development in pavement technologies and synergistic benefits — in the form of lower transportation, logistics costs and increase in manufacturing efficiency — from pine chemicals operations acquired from Georgia-Pacific. Also, the company believes that stricter norms, related to the emission of gasoline vapor, will boost demand for products offered by Performance Materials segment.
The company anticipates revenues in 2018 to come within $1.07-$1.13 billion range, representing year-over-year growth of 13% at mid-point. Its earnings before interest, taxes, depreciation and amortization (EBITDA) are predicted to grow roughly 22% (at mid-point) to $285-$305 million range.
Ingevity aims at generating revenues of approximately $1.5 billion by 2022 while predicting adjusted EBITDA to be roughly $500 million. Its Performance Materials segment will benefit from strong demand for carbon technologies in the automotive and process purification industries. Capital expenditures are about to improve global networks and investments in patenting products are priorities for the company. By 2022, it targets to double the segment’s revenues generated in 2015. For the Performance Chemical, the company believes that growth in pavement technologies, oilfield technologies and industrial specialties will be prime growth drivers.
Earnings estimates for 2018 have been revised upward by two analysts, while that for 2019 have been raised by one in the last 30 days. Currently, the Zacks Consensus Estimate stands at $3.16 for 2018 and $3.99 for 2019, representing 10.9% and 16.3% increase over their respective estimates 30 days ago.
Other stocks worth considering in the industry include CSW Industrials, Inc. (CSWI - Free Report) , H. B. Fuller Company (FUL - Free Report) and Versum Materials, Inc. . While CSW Industrials sports a Zacks Rank #1, both H. B. Fuller and Versum Materials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CSW Industrials’ earnings estimates for fiscal 2018 (ending March 2018) and fiscal 2019 (ending March 2019) have improved over the last 60 days. Also, the company pulled off an average positive earnings surprise of 9.55% in the trailing four quarters.
H. B. Fuller’s earnings estimates for fiscal 2018 (ending November 2018) and fiscal 2019 (ending November 2019) have been revised upward over the past 60 days.Its earnings are projected to grow 14.80% in the next five years.
Versum Materials has witnessed upward earnings estimate revisions for fiscal 2018 (ending September 2018) and fiscal 2019 (ending September 2019) over the past 60 days. The company has delivered an average positive earnings surprise of 6.03% in the trailing four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Ingevity's (NGVT) Growth Potential Solid on Rising Demand
We believe that Ingevity Corporation (NGVT - Free Report) is a solid choice for investors seeking exposure in the chemical space. The company is well-positioned to leverage benefits from products offered under its Performance Materials and Performance Chemicals segments.
The stock was upgraded to a Zacks Rank #1 (Strong Buy) on Feb 23. It currently has a market capitalization of approximately $3.4 billion.
Ingevity has reported better-than-expected earnings in the last four quarters, pulling off an average positive earnings surprise of 13.30%. Notably, the company’s shares have rallied 6.5% in the last three years, outperforming 3.3% decline of the industry.
Why the Upgrade?
Ingevity’s bottom-line results for fourth-quarter 2017 surpassed the Zacks Consensus Estimate by 25% and increased 32.4% on a year-over-year basis. Net sales were up 8.8% on the back of 17.7% sales growth in Performance Materials segment and 3.7% increase in Performance Chemicals segment’s sales.
For 2018, Ingevity anticipates that its Performance Chemicals segment will benefit from oilfield recovery, development in pavement technologies and synergistic benefits — in the form of lower transportation, logistics costs and increase in manufacturing efficiency — from pine chemicals operations acquired from Georgia-Pacific. Also, the company believes that stricter norms, related to the emission of gasoline vapor, will boost demand for products offered by Performance Materials segment.
The company anticipates revenues in 2018 to come within $1.07-$1.13 billion range, representing year-over-year growth of 13% at mid-point. Its earnings before interest, taxes, depreciation and amortization (EBITDA) are predicted to grow roughly 22% (at mid-point) to $285-$305 million range.
Ingevity aims at generating revenues of approximately $1.5 billion by 2022 while predicting adjusted EBITDA to be roughly $500 million. Its Performance Materials segment will benefit from strong demand for carbon technologies in the automotive and process purification industries. Capital expenditures are about to improve global networks and investments in patenting products are priorities for the company. By 2022, it targets to double the segment’s revenues generated in 2015. For the Performance Chemical, the company believes that growth in pavement technologies, oilfield technologies and industrial specialties will be prime growth drivers.
Earnings estimates for 2018 have been revised upward by two analysts, while that for 2019 have been raised by one in the last 30 days. Currently, the Zacks Consensus Estimate stands at $3.16 for 2018 and $3.99 for 2019, representing 10.9% and 16.3% increase over their respective estimates 30 days ago.
Ingevity Corporation Price and Consensus
Ingevity Corporation Price and Consensus | Ingevity Corporation Quote
Other Stocks to Consider
Other stocks worth considering in the industry include CSW Industrials, Inc. (CSWI - Free Report) , H. B. Fuller Company (FUL - Free Report) and Versum Materials, Inc. . While CSW Industrials sports a Zacks Rank #1, both H. B. Fuller and Versum Materials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CSW Industrials’ earnings estimates for fiscal 2018 (ending March 2018) and fiscal 2019 (ending March 2019) have improved over the last 60 days. Also, the company pulled off an average positive earnings surprise of 9.55% in the trailing four quarters.
H. B. Fuller’s earnings estimates for fiscal 2018 (ending November 2018) and fiscal 2019 (ending November 2019) have been revised upward over the past 60 days.Its earnings are projected to grow 14.80% in the next five years.
Versum Materials has witnessed upward earnings estimate revisions for fiscal 2018 (ending September 2018) and fiscal 2019 (ending September 2019) over the past 60 days. The company has delivered an average positive earnings surprise of 6.03% in the trailing four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>