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Chemours Inks Deal to Facilitate Distribution of XP40 in EU

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The Chemours Company (CC - Free Report) inked a deal with Arkema for the distribution of XP40 (R-449A) in the European Union (EU), to meet rising demand for low global warming potential (GWP) refrigerants under the F-Gas Regulation.

The 2018 F-Gas regulation as well as phasedown reduction of 37% has created significant demand for low GWP alternatives to replace traditional products, such as R-404A/R-507A. Hence, leading supermarkets, retailers, contractors, distributors and end-users in the EU currently prefer XP40. It is known for delivering improved performance with a more sustainable environmental footprint and over 65% reduction in GWP versus existing products.

This move will help the company to make the product more accessible to customers. XP40 plays a key role in enabling the market to comply with the F-Gas Regulation.

Chemours has outperformed the industry it belongs to for more than a year. The company’s shares have gained 24.9%, compared with roughly 9.7% rise recorded by the industry.

Factoring in solid first-quarter results and visibility into the balance of 2018, Chemours expects that adjusted EBITDA for 2018 will be at the top end of its earlier announced range of $1.7-$1.85 billion, driven by sustained positive momentum across its businesses.

Chemours also expects to deliver further margin expansion throughout the balance of 2018. The company also anticipates to deliver more than $700 million free cash flow in 2018.  

Chemours is gaining from healthy demand for Ti-Pure TiO2, sustained adoption of Opteon refrigerant and higher demand for fluoropolymers products. Higher adoption of Ti-Pure TiO2 products is driving results in the company’s Titanium Technologies division, as witnessed in the first quarter. Chemours should also gain from favorable pricing and demand in the Fluoroproducts segment in 2018.

Moreover, Chemours completed its acquisition of ICOR International in April 2018. The buyout boosts its refrigerant portfolio and expands its channel access across its markets.

Chemours Company (The) Price and Consensus

Zacks Rank & Stocks to Consider

Chemours is a Zacks Rank #1 (Strong Buy) stock.

Some better-ranked companies in the basic materials space are FMC Corp. (FMC - Free Report) , Celanese Corp. (CE - Free Report) and Koninklijke DSM NV (RDSMY - Free Report) . All three stocks sport a Zacks Rank #1.  You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp. has an expected long-term earnings growth rate of 16.4%. Its shares have gained around 19.6% over a year.

Celanese has an expected long-term earnings growth rate of 8.9%. Its shares have moved up around 31.8% over a year.

Koninklijke DSM has an expected long-term earnings growth rate of 7.7%. Its shares have gained around 34.3% over a year.

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