Yahoo Finance Ashland (ASH) Shares Up 11% in 6 Months: What's Driving It?
Ashland Inc.’s ASH shares have gained 11% over the past six months. The company has also outperformed its industry’s decline of 8.1% over the same time frame. It has also topped the S&P 500’s 1.6% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
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What’s Going in ASH’s Favor?
Better-than-expected earnings performance in the fiscal fourth quarter and upbeat prospects have contributed to the gain in the company's shares. The company’s adjusted earnings for the fourth quarter of fiscal 2022 (ending Sep 30, 2022) of $1.46 per share rose from the year-ago quarter’s figure of $1.22. It also topped the Zacks Consensus Estimate of $1.39. Ashland gained from its disciplined pricing actions and better product mix in the quarter.
The company is benefiting from solid demand in most consumer end markets. Its industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company is also gaining from the contributions from the Schulke & Mayr acquisition.
The company is also taking a number of actions including reduction of operating costs to boost profitability. Cost-reduction measures are expected to support its margins in fiscal 2023. The company’s pricing measures are also contributing to its top line growth. Its pricing and mix improvement actions are expected to cover the current inflation.
Ashland also remains committed to boosting its cash flows and returning value to shareholders. The company remains focused on expanding margins and improving free cash flow conversion. It generated cash flows from operating activities of $179 million in the last reported quarter, up around 19% year over year. The company, in May 2022, raised its quarterly cash dividend by 12% to 33.5 cents per share. Its board also authorized a new, evergreen $500-million common stock repurchase program.
Ashland Inc. Price and Consensus
Ashland Inc. price-consensus-chart | Ashland Inc. 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 51% 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 47% 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 81% in a year. The company currently carries a Zacks Rank #2 (Buy).
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Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Ashland Inc. (ASH) : Free Stock Analysis Report
Commercial Metals Company (CMC) : Free Stock Analysis Report
Olympic Steel, Inc. (ZEUS) : Free Stock Analysis Report