The Chemours Company CC is benefiting from higher demand for its Opteon refrigerants, strong execution, higher pricing and cost-cutting measures amid headwinds from raw material cost inflation.
The company’s shares are up 4.4% over a year, compared with a 0.9% rise recorded by its industry.
Image Source: Zacks Investment Research
Chemours is gaining from higher Opteon adoption, strong execution and its cost-reduction and pricing actions. The company’s Thermal & Specialized Solutions segment is benefiting from strong demand in refrigerants across most regions. It is also witnessing strong adoption of the Opteon platform, which is supporting volumes in this segment. Chemours remains committed toward driving Opteon adoption.
Chemours is also gaining from its efforts to reduce costs. Its cost-reduction program along with its productivity and operational improvement actions across its businesses are expected to support its margins in 2022. The company is taking actions to reduce fixed costs in the Titanium Technologies division. It is also taking appropriate pricing measures to counter higher costs. It gained from higher pricing in the third quarter of 2022, driven by contractual price changes.
The company also remains focused on boosting its cash flows and returning value to shareholders. Its cash provided by operating activities was $301 million for the third quarter. The company repurchased $79 million of common stock during the quarter, resulting in total share repurchases of $351 million as of Sep 30, 2022.
However, Chemours is exposed to headwinds from global logistics and supply-chain issues. It is being challenged by raw material cost inflation due to supply constraints. Supply-chain challenges and raw material availability issues are likely to continue moving ahead. Headwinds from raw material, logistics and energy costs are likely to persist in the remainder of 2022.
The company’s Titanium Technologies unit also faces challenges from ore supply issues. The division is also facing volume pressure due to weaker demand amid macroeconomic uncertainties. Volumes in this unit fell 16% year over year in the third quarter, hurt by lower demand, especially in Europe and Asia. Demand weakness in this segment is likely to continue in the fourth quarter.
The Chemours Company Price and Consensus
The Chemours Company price-consensus-chart | The Chemours Company Quote
Zacks Rank & Key Picks
Chemours currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Olympic Steel, Inc. ZEUS and Commercial Metals Company CMC.
Sociedad has a projected earnings growth rate of 520% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.9% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 56% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel currently carries a Zacks Rank #1. The consensus estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 67% in a year.
Commercial Metals currently carries a Zacks Rank #1. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 13.8% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 55% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report