UK Markets close in 5 hrs 19 mins

Ingevity (NGVT) Gains on Strong Demand, Capacity Expansion

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

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 capacity amid headwinds from higher input and logistics costs.

Ingevity, a Zacks Rank #3 (Hold) stock, is seeing continued recovery in demand for its industrial specialties products from the pandemic-induced slowdown, which is leading to higher volumes and prices. The company benefited from strong volume gains in the Performance Chemicals segment on solid demand as well as higher selling prices in engineered polymers and industrial specialties in the first quarter of 2022.

Revenues in the Performance Chemicals segment were driven, in the first quarter, by strong volume growth and price increases. Ingevity is witnessing strong demand for engineered polymers and industrial specialties applications. Demand for automotive carbon and honeycomb products also remains solid, driving results in the Performance Materials unit. The company is benefiting from increased demand for process purification products. 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 is working to enhance the production capacity of alternative fatty acid at the Crossett facility, which will support more substantial future sales growth. It also remains on track to add polyol capacity at its DeRidder plant. The company is also working on a number of debottlenecking projects at its performance materials facilities.

The company 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.

However, the company is facing costs-related headwinds as witnessed in the first 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 and Consensus
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 Nutrien Ltd. NTR, Albemarle Corporation ALB and Cabot Corporation CBT.

Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 163.4% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied 45% in a year.

Albemarle has a projected earnings growth rate of 203.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 105% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 47% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 20% over a year.


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
 
Albemarle Corporation (ALB) : Free Stock Analysis Report
 
Cabot Corporation (CBT) : Free Stock Analysis Report
 
Ingevity Corporation (NGVT) : Free Stock Analysis Report
 
Nutrien Ltd. (NTR) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting