We believe that The Chemours Company CC is a solid choice for investors, seeking exposure in the chemical space. Healthy demand for its products, efforts for improving capacities, favorable pricing and shareholder-friendly policy raised the company’s investment appeal.
The stock, upgraded to a Zacks Rank #1 (Strong Buy) on Mar 27, has a market capitalization of roughly $8.6 billion. Its investment appeal is further accentuated by a VGM Score of A.
Chemours Company delivered better-than-expected earnings in three of the last four quarters, recording an average positive earnings surprise of 21.47%. Notably, the shares rallied 30.8% in the last year, outperforming 8.5% gain of the industry.
Why the Upgrade?
We are providing a snapshot of how Chemours Company fared in the fourth quarter of 2017. Its earnings of $1.19 surpassed the Zacks Consensus Estimate by 25.26%. Net sales were up 19% year over year on the back of rising price of Ti-Pure titanium dioxide, favorable forex impact and volume growth in the three segments — Titanium Technologies, Chemical Solutions and Fluoroproducts.
In the quarters ahead, Chemours Company’s efforts to reduce costs, the optimization of its business portfolio as evident from a restructured Chemical Solutions segment and investments aimed at enhancing the capacity of the Mexico-based Mining Solutions manufacturing facility will be advantageous. Also, the company stands to gain from increasing Opteon platform and growing applications of fluoropolymers, especially in automotive, electronics and energy end-markets. Currently, it is constructing Opteon plant in Texas, which is expected to be completed in 2018.
Chemours Company anticipates gaining from the higher-than-expected demand for Ti-Pure titanium dioxide as well as favorable pricing and demand for the Fluoroproducts segment in 2018. On the back of these aspects, it has raised the projections for 2018, yesterday. It now anticipates adjusted earnings before interest, taxes, depreciation and amortization to be at the high end of its previous forecast of $1.7-$1.85 billion while earnings per share to be at the high end of $4.95-$5.60.
Also, the company is working diligently to return a higher value to shareholders. In January 2018, it has repurchased $34 million shares while recording buybacks of roughly $150 million since December 2017.
In the last 60 days, the stock’s earnings estimates were revised upward by two brokerage firms for both 2018 and 2019. The Zacks Consensus Estimate currently stands at $5.30 for 2018 and $5.97 for 2019, reflecting an increase of 6% and 2.9% from the respective 60-day-ago tallies.
Chemours Company (The) Price and Consensus
Chemours Company (The) Price and Consensus | Chemours Company (The) Quote
Other Stocks to Consider
Other stocks worth considering in the industry include LyondellBasell Industries N.V. LYB, Kronos Worldwide, Inc. KRO and Stepan Company SCL. While both LyondellBasell Industries and Kronos Worldwide sport a Zacks Rank #1, Stepan Company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for these three stocks improved for the current year. Also, average positive earnings surprise for the last four quarters was 2.14% for LyondellBasell Industries, 35.01% for Kronos Worldwide and 15.70% for Stepan Company.
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