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Kronos Worldwide (KRO) Scales 52-Week High: What's Driving It?

Kronos Worldwide, Inc.’s KRO shares hit a fresh 52-week high of $14.28 on May 28, before retracing to close the session at $14.17.

The stock has rallied 63.1% over a year, outperforming its industry’s 3.3% rise. It has also topped the S&P 500’s roughly 26.1% rise over the same period.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research


 

Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.

 

What’s Going in KRO’s Favor?

Better-than-expected earnings performance in the first quarter of 2024 and an upbeat outlook have contributed to the run-up in the company's shares. Kronos Worldwide’s earnings of 7 cents per share for the first quarter topped the Zacks Consensus Estimate of 4 cents.

Net sales climbed around 12% year over year to $478.8 million and surpassed the Zacks Consensus Estimate of $454.6 million. The company benefited from higher sales volumes driven by stronger demand for titanium dioxide (TiO2) in major markets.

KRO is poised well to gain from higher demand for TiO2. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.

The company expects sales volumes in 2024 to exceed 2023 levels factoring in the recently experienced improved demand and expectations that demand will continue to improve this year.

Kronos Worldwide is also taking actions to reduce costs and align production and inventories to expected demand levels, which are expected to support its margins. It has increased its production rates in sync with current and expected near-term demand improvement. It expects its production rates for the balance of 2024 to be higher than the level witnessed in 2023.

Moreover, the company’s internal cost initiatives are expected to continue to support margins in 2024. KRO envisions reduced energy costs along with its cost-cutting initiatives and the realization of selling price increases to result in improved margins on a year-over-year basis this year. It expects to report higher operating results on a year-over-year basis for full-year 2024 based on the expected improved demand, higher selling prices and reduced production costs.

 

Kronos Worldwide Inc Price and Consensus

 

Kronos Worldwide Inc Price and Consensus
Kronos Worldwide Inc Price and Consensus

Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote

 

Stocks to Consider

Better-ranked stocks in the basic materials space include Axalta Coating Systems Ltd. AXTA, Carpenter Technology Corporation CRS and ATI Inc. ATI.

Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared roughly 150% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axalta Coating Systems, carrying a Zacks Rank #1, has a projected earnings growth rate of 26.8% for the current year. In the past 60 days, the consensus estimate for AXTA's current-year earnings has been revised upward by 5.9%. The company’s shares have gained roughly 16% in the past year.

ATI currently carries a Zacks Rank #1. ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have rallied around 77% in the past year.

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Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

Kronos Worldwide Inc (KRO) : Free Stock Analysis Report

Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report

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