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Ingevity (NGVT) Authorizes Share Repurchase Worth $500M

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Ingevity Corporation (NGVT - Free Report) announced that its board approved an authorization to buy back up to $500 million of its outstanding common stock.

Additionally, the company plans to purchase up to $250 million in shares over the coming 12 to 18 months.

Notably, in view of the new authorization, its 2017 and 2018 stock repurchase plans have been rescinded.

Per management, prioritizing share buyback is warranted given the existing market conditions and its expectations for the company. Notably, the authorization gives Ingevity the flexibility to be opportunistic through 2020.

Shares of the company have lost 57.1% in the past year compared with the industry’s decline of 9.6%.

 

 

On the fourth-quarter earnings call, Ingevity expected sales of $1.3-$1.35 billion for 2020. It also anticipated adjusted EBITDA of $400-$420 million for the year.

Free cash flow for 2020 has been forecast to be $200-$220 million.

The company expects little to no improvement in the global macroeconomic climate but anticipates minimal impact (which is yet to be known) from the coronavirus outbreak in China.

It expects revenues to be flat to down modestly for the Performance Chemicals segment. Engineered polymers and pavement technologies are expected to witness solid growth, which is likely to be offset by ongoing pressure in industrial specialties and oilfield applications.

Ingevity also expects to generate double-digit revenue growth and accretion in adjusted EBITDA margins for the Performance Materials unit.

Ingevity Corporation Price and Consensus

 

Zacks Rank & Stocks to Consider

Ingevity currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. (DQ - Free Report) , NovaGold Resources Inc. (NG - Free Report) and Commercial Metals Company (CMC - Free Report) .

Daqo New Energy has a projected earnings growth rate of 353.7% for 2020. The company’s shares have rallied 70.7% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have surged 117.2% in a year.

Commercial Metals currently has a Zacks Rank #2 and a projected earnings growth rate of 21.6% for 2020. The company’s shares have rallied 11.3% in a year.

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