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Ingevity (NGVT) Stock Up 43% in a Year: What's Driving it?
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Shares of Ingevity Corporation (NGVT - Free Report) have rallied 43.3% in the past year against the industry’s decline of roughly 1.2%.
The company has a market cap of roughly $3.4 billion and average volume of shares traded in the last three months was around 230.8K. It has an expected long-term earnings per share growth rate of 12%.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Driving Factors
Forecast-topping earnings performance, upbeat outlook and solid growth prospects are contributing to the rally in Ingevity’s shares.
The company recorded a profit of $35.8 million or 72 cents per share in the first quarter of 2018, up roughly 56% from $23 million or 45 cents a year ago. Adjusted earnings of 79 cents per share surpassed the Zacks Consensus Estimate of 61 cents.
Notably, Ingevity topped the Zacks Consensus Estimate for earnings in each of the trailing four quarters with an average positive surprise of 20.2%.
Ingevity, in May, narrowed and increased the mid-point for full-year 2018 guidance for sales and adjusted EBITDA. It now expects sales for the year in the range of $1.10-$1.13 billion compared with prior view of $1.07-$1.13 billion. Adjusted EBITDA is expected to be between $293 million and $307 million compared with prior view of $285-$305 million.
The company is expected to gain from its strategy to pursue value-creating acquisitions. Earlier this year, the company closed the buyout of Georgia-Pacific’s pine chemicals business for $310 million. The acquisition contributed roughly $5 million to Performance Chemicals division’s sales and $2 million to the segment EBITDA in the first quarter. The buyout is expected to create net synergies of roughly $11 million through manufacturing optimization, lower logistics costs and leveraged procurement costs.
Moreover, the Performance Chemicals unit is likely to gain from higher adoption of TOFA-based products. Also, a recovery in TOFA prices had considerable positive impact on overall margins of the division in the last reported quarter. Ingevity expects its high margin application areas to continue strengthening, going forward.
Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 15.3% in a year.
FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 19.6% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 61.6% in a year.
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Ingevity (NGVT) Stock Up 43% in a Year: What's Driving it?
Shares of Ingevity Corporation (NGVT - Free Report) have rallied 43.3% in the past year against the industry’s decline of roughly 1.2%.
The company has a market cap of roughly $3.4 billion and average volume of shares traded in the last three months was around 230.8K. It has an expected long-term earnings per share growth rate of 12%.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
Driving Factors
Forecast-topping earnings performance, upbeat outlook and solid growth prospects are contributing to the rally in Ingevity’s shares.
The company recorded a profit of $35.8 million or 72 cents per share in the first quarter of 2018, up roughly 56% from $23 million or 45 cents a year ago. Adjusted earnings of 79 cents per share surpassed the Zacks Consensus Estimate of 61 cents.
Notably, Ingevity topped the Zacks Consensus Estimate for earnings in each of the trailing four quarters with an average positive surprise of 20.2%.
Ingevity, in May, narrowed and increased the mid-point for full-year 2018 guidance for sales and adjusted EBITDA. It now expects sales for the year in the range of $1.10-$1.13 billion compared with prior view of $1.07-$1.13 billion. Adjusted EBITDA is expected to be between $293 million and $307 million compared with prior view of $285-$305 million.
The company is expected to gain from its strategy to pursue value-creating acquisitions. Earlier this year, the company closed the buyout of Georgia-Pacific’s pine chemicals business for $310 million. The acquisition contributed roughly $5 million to Performance Chemicals division’s sales and $2 million to the segment EBITDA in the first quarter. The buyout is expected to create net synergies of roughly $11 million through manufacturing optimization, lower logistics costs and leveraged procurement costs.
Moreover, the Performance Chemicals unit is likely to gain from higher adoption of TOFA-based products. Also, a recovery in TOFA prices had considerable positive impact on overall margins of the division in the last reported quarter. Ingevity expects its high margin application areas to continue strengthening, going forward.
Ingevity Corporation Price and Consensus
Ingevity Corporation Price and Consensus | Ingevity Corporation Quote
Other Stocks to Consider
Some other top-ranked stocks in the basic materials space are The Chemours Company (CC - Free Report) , FMC Corporation (FMC - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 15.3% in a year.
FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 19.6% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 61.6% in a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>