Yahoo Finance Ingevity (NGVT) Gains on Demand Strength and Growth Actions
Ingevity Corporation NGVT is poised to benefit from higher demand and prices in its industrial specialties and engineered polymers businesses, and its actions to drive growth amid headwinds from cost inflation.
Shares of Ingevity, a Zacks Rank #3 (Hold) stock, have risen 4.1% over the past year against the 26.1% decline of its industry.
Image Source: Zacks Investment Research
Ingevity is benefiting from a recovery in demand for its products from the pandemic-induced slowdown, which is leading to higher volumes and prices. The company’s Performance Chemicals segment is riding on solid demand as well as higher selling prices in engineered polymers and industrial specialties. The company is also benefiting from increased demand for process purification products in the Performance Materials unit. Strong demand is expected to continue to support its top line and margins moving ahead.
Ingevity is also taking a number of actions to drive long-term growth. It remains committed to invest organically. The company also remains focused on optimizing its operations and inventory to provide outstanding service to customers. It is also taking price hike actions to mitigate cost inflation. Ingevity is also committed to capturing the maximum value for its products.
The acquisition of Ozark Materials also strengthens the company’s position in the paving construction industry and enables it to better serve its customers. Ozark Materials is a leading manufacturer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints and preformed thermoplastics.
The company’s $60 million investment to buy an equity stake in Nexeon Limited also establishes its presence in the electric vehicle (EV) market along with providing opportunities to expand its activated carbon business. The investment includes a commitment to jointly develop technology for EVs using Ingevity’s activated carbon to improve the performance of lithium-ion batteries.
However, the company is facing costs-related headwinds as witnessed in the third quarter. Higher freight and raw material costs and energy inflation are affecting its results. Raw material inflation is expected to continue in the remainder of 2022 due to persistent supply chain issues. As such, higher input costs are likely to weigh on its bottom line. Higher logistics costs due to disruptions in supply chains are another concern.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. ZEUS, Commercial Metals Company CMC and Steel Dynamics, Inc. STLD.
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 49% in a year.
Commercial Metals currently carries a Zacks Rank #1. The 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 48% in a year.
Steel Dynamics has a projected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for STLD’s current-year earnings has been revised 7.3% upward in the past 60 days.
Steel Dynamics has a trailing four-quarter earnings surprise of roughly 6.2%. STLD has rallied roughly 79% in a year. The company currently carries a Zacks Rank #2 (Buy).
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
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Commercial Metals Company (CMC) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report
Ingevity Corporation (NGVT) : Free Stock Analysis Report
