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Ingevity (NGVT) Up 16% in 6 Months: What's Driving the Stock?
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Shares of Ingevity Corporation (NGVT - Free Report) are up around 16% over the past six months. The company has also outperformed its industry’s decline of roughly 3% over the same time frame.
Ingevity, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $3.9 billion and average volume of shares traded in the last three months was around 255.8K. 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 chemical maker.
Driving Factors
Better-than-expected earnings performance and upbeat outlook have contributed to the run-up in Ingevity’s shares. The company delivered strong third-quarter results on the back of higher demand across its businesses, Georgia-Pacific pine chemicals acquisition and solid operational performance.
Ingevity’s profits for the quarter surged roughly 46% year over year to $49.5 million or $1.16 per share. Earnings per share topped the Zacks Consensus Estimate of $1.04.
The company’s revenues rose roughly 18% year over year to $311.2 million, also exceeding the Zacks Consensus Estimate of $305.5 million.
Adjusted EBITDA for the third quarter climbed roughly 25% year over year to $90.7 million on the back of increased volumes, better price and mix, and reduced raw materials and production costs.
Notably, Ingevity has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 19.8%.
Ingevity increased the mid-point and narrowed the range for its 2018 guidance for adjusted EBITDA to $306-$314 million from $302-$314 million. The company reaffirmed its sales guidance of between $1.10 billion and $1.13 billion for the year.
Ingevity is gaining from strong demand, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution and strong productivity.
Sales growth in the oilfield industry on the back of higher U.S. drilling and production is also driving revenues in the company’s Performance Chemicals division. Moreover, sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations is contributing to the growth in the Performance Materials unit.
The company is well poised to benefit from its buyout of Georgia-Pacific’s pine chemicals business. The acquisition contributed to strong growth in sales of the Performance Chemicals division in the third quarter. The acquisition is expected to create net synergies of roughly $11 million through manufacturing optimization, lower logistics costs and leveraged procurement costs.
The Performance Chemicals segment should also benefit from higher adoption of tall oil fatty acid (TOFA)-based products. Healthy TOFA pricing is also providing support to the margins of the division. The company expects high margin application areas to continue gaining strength.
Mosaic has expected long-term earnings growth rate of 7%. Its shares have surged 45% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have rallied 20% in a year.
Methanex has expected long-term earnings growth rate of 15%. Its shares have gained 7% in the past 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.
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Ingevity (NGVT) Up 16% in 6 Months: What's Driving the Stock?
Shares of Ingevity Corporation (NGVT - Free Report) are up around 16% over the past six months. The company has also outperformed its industry’s decline of roughly 3% over the same time frame.
Ingevity, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $3.9 billion and average volume of shares traded in the last three months was around 255.8K. 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 chemical maker.
Driving Factors
Better-than-expected earnings performance and upbeat outlook have contributed to the run-up in Ingevity’s shares. The company delivered strong third-quarter results on the back of higher demand across its businesses, Georgia-Pacific pine chemicals acquisition and solid operational performance.
Ingevity’s profits for the quarter surged roughly 46% year over year to $49.5 million or $1.16 per share. Earnings per share topped the Zacks Consensus Estimate of $1.04.
The company’s revenues rose roughly 18% year over year to $311.2 million, also exceeding the Zacks Consensus Estimate of $305.5 million.
Adjusted EBITDA for the third quarter climbed roughly 25% year over year to $90.7 million on the back of increased volumes, better price and mix, and reduced raw materials and production costs.
Notably, Ingevity has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 19.8%.
Ingevity increased the mid-point and narrowed the range for its 2018 guidance for adjusted EBITDA to $306-$314 million from $302-$314 million. The company reaffirmed its sales guidance of between $1.10 billion and $1.13 billion for the year.
Ingevity is gaining from strong demand, contributions of Georgia-Pacific pine chemicals acquisition, excellent commercial and operational execution and strong productivity.
Sales growth in the oilfield industry on the back of higher U.S. drilling and production is also driving revenues in the company’s Performance Chemicals division. Moreover, sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations is contributing to the growth in the Performance Materials unit.
The company is well poised to benefit from its buyout of Georgia-Pacific’s pine chemicals business. The acquisition contributed to strong growth in sales of the Performance Chemicals division in the third quarter. The acquisition is expected to create net synergies of roughly $11 million through manufacturing optimization, lower logistics costs and leveraged procurement costs.
The Performance Chemicals segment should also benefit from higher adoption of tall oil fatty acid (TOFA)-based products. Healthy TOFA pricing is also providing support to the margins of the division. The company expects high margin application areas to continue gaining strength.
Ingevity Corporation Price and Consensus
Ingevity Corporation Price and Consensus | Ingevity Corporation Quote
Stocks to Consider
Stocks worth considering in the basic materials space include The Mosaic Company (MOS - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Methanex Corporation (MEOH - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Mosaic has expected long-term earnings growth rate of 7%. Its shares have surged 45% in the past year.
CF Industries has expected long-term earnings growth rate of 6%. Its shares have rallied 20% in a year.
Methanex has expected long-term earnings growth rate of 15%. Its shares have gained 7% in the past 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>>