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Kronos Worldwide (KRO) Up 29% in 3 Months: What’s Driving It?


Shares of chemical maker, Kronos Worldwide, Inc. KRO have rallied around 29% over the last three months. The company has also outperformed its industry’s gain of roughly 11% over the same time frame.

Kronos Worldwide has a market cap of roughly $3.2 billion and average volume of shares traded in the last three months is around 418.9K. The company has expected long-term earnings per share growth of around 5%.

Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.

Driving Factors

Strong third-quarter 2017 results and upbeat outlook have contributed to the rally in Kronos Worldwide’s shares. The company witnessed a significant rise in profits in the quarter on the back of higher average selling prices and increased sales and production volumes. Earnings of 64 cents per share for the quarter climbed from 19 cents a year ago and also topped the Zacks Consensus Estimate of 45 cents.

Net revenues jumped around 30% year over year to $464.5 million, on the back of higher titanium dioxide (TiO2) selling prices and increased sales volumes. Sales beat the Zacks Consensus Estimate of $448 million.

Kronos Worldwide saw strong sales volumes during the first nine months of 2017. It is witnessing strong demand for TiO2 products across most segments. The company is also gaining from higher pricing. It saw average selling prices increasing 21% in the first nine months.

Kronos Worldwide expects its production volumes to be higher in 2017 on a year-over-year basis as production rates this year will be favorably impacted by the implementation of certain productivity-enhancing improvement projects at some facilities. Also, the company anticipates increased sales volume in 2017 compared to 2016.

The company also envisions income from operations in 2017 will be higher on a year-over-year basis, mainly due to an expected increase in average selling prices and the favorable impact of anticipated higher production and sales volumes in 2017.

Kronos Worldwide Inc Price and Consensus

Kronos Worldwide Inc Price and Consensus | Kronos Worldwide Inc Quote

Other Stocks to Consider

Other top-ranked companies in the basic materials space include Ingevity Corporation NGVT, Koppers Holdings Inc. KOP and Kraton Corporation KRA, all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has an expected long-term earnings growth of 12%. The stock has gained around 41% year to date.

Koppers has an expected long-term earnings growth of 18%. The stock has gained around 23% year to date.

Kraton has an expected earnings growth of 25.4% for the current year. Its shares are up roughly 61% year to date.

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