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What Drove Ingevity Corporation to a New 52-week High?

Zacks

Shares of Ingevity Corporation NGVT reached a new 52-week high of $46.71 on Sep 15, before closing the trading session slightly lower at $46.21. This apex improved upon the last 52-week high of $46.57 on Sep 6.

The trading volume for the session on Sep 15 was 0.56 million shares. Earnings estimate revisions for 2016 and 2017 as well as estimated earnings growth rate of 10% for the next 3−5 years indicate Ingevity Corporation’s potential for further price appreciation.

Growth Drivers

Financial performance of Ingevity Corporation in the last quarter was impressive, with earnings of 66 cents per share surpassing the Zacks Consensus Estimate of 49 cents by 34.7%. The decline of 5.1% in net sales was partially offset by lower cost of sales and operating expenses, achieved on the back of the company’s cost-reduction initiatives.

For 2016, Ingevity Corporation anticipates benefiting from the strength in its Performance Materials segment. Also, the company anticipates higher demand for innovative pavement chemistries in its Performance Chemicals segment. On the back of these positives, the company has raised its sales guidance to $880−$910 million, with a mid-point of $895 million, from the previous outlook of $870−$910 million, with a mid-point of $890 million. Also, the company’s cost-reduction efforts are estimates to result in $25−$30 million savings in the year.

We believe that the impressive outlook created positive momentum for Ingevity Corporation, driving the company’s share price higher by 21.8% since the release of second-quarter 2016 results on Aug 3.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Ingevity Corporation grew 6.1% to $1.92 for 2016 and 2.6% to $2.36 for 2017. The estimate for 2017 represents year-over-year growth of 22.9%.

INGEVITY CORP Price and Consensus


INGEVITY CORP Price and Consensus | INGEVITY CORP Quote

With a market capitalization of approximately $2 billion, Ingevity Corporation carries a Zacks Rank #2 (Buy). Other stocks worth considering in the chemical-diversified industry include NL Industries Inc. NL, Green Plains Inc. GPRE and Minerals Technologies Inc. MTX. While NL Industries sports a Zacks Rank #1(Strong Buy), both Green Plains and Minerals Technologies carry the same Zacks Rank as Ingevity Corporation. You can see the complete list of today’s Zacks #1 Rank stocks here.

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