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Chemours (CC) Benefits From Opteon Adoption Amid Demand Woes

The Chemours Company CC is gaining from higher adoption of its Opteon refrigerants, strong execution, higher pricing and cost-cutting measures amid challenges from a slow demand recovery.

The company’s shares are up 1.8% over a year, compared with 10.8% rise recorded by its industry.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research


Chemours, a Zacks Rank #3 (Hold) stock, is benefiting from strong execution and its cost-reduction and pricing actions. Its Thermal & Specialized Solutions segment is witnessing strong adoption of the Opteon platform. The company remains committed toward driving Opteon adoption. Higher prices are also contributing to the segment’s sales.

The company 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 2023. It is also taking appropriate pricing measures to counter cost inflation in raw materials.

Moreover, CC remains focused on boosting its cash flows and returning value to shareholders. It generated cash from operating activities of $754 million and free cash flow of $447 million in 2022. It also paid dividends worth $154 million and returned $495 million through share repurchases during the year. CC also repurchased $37 million of common stock and paid dividends worth $38 million in the second quarter of 2023. It expects to generate free cash flow of more than $325 million in 2023.

However, continued softness in advanced materials is likely to weigh on volumes in the Advanced Performance Materials segment. Demand is expected to remain weak in advanced materials for products that serve economically sensitive end markets. The company’s shift to higher value and differentiated products has also resulted in weaker demand in non-strategic end markets. Chemours sees weaker demand in advanced materials in second-half 2023.

While destocking in China and Europe has largely ended, the pace of demand recovery is expected to be modest over the near term, given the weak global economic recovery and continued macroeconomic uncertainties. This is likely to adversely impact volumes in the Titanium Technologies segment in the third quarter.

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The Chemours Company Price and Consensus

 

The Chemours Company Price and Consensus
The Chemours Company Price and Consensus

The Chemours Company price-consensus-chart | The Chemours Company Quote

 

Stocks to Consider

Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation CRS, Hawkins, Inc. HWKN and PPG Industries, Inc. PPG.

The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 91% in a year.

Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.

Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 63% in a year.

PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.

PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 14% in a year.

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PPG Industries, Inc. (PPG) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

The Chemours Company (CC) : Free Stock Analysis Report

Hawkins, Inc. (HWKN) : Free Stock Analysis Report

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