Ingevity Corporation (NGVT) has seen a significant rise, with its stock jumping approximately 40% over the past three months. Expectations are high for NGVT as it focuses on restructuring its Performance Chemicals segment, making strategic acquisitions, and implementing growth strategies.
We are optimistic about the company’s future and suggest considering NGVT for your investment portfolio, as it appears ready to maintain its upward momentum.
Let’s explore the reasons why NGVT stock is an appealing investment right now.
Positive Trends in NGVT’s Earnings Estimates
Earnings projections for NGVT have improved in the past 60 days, indicating growing analyst confidence. The Zacks Consensus Estimate for the current year has risen by 15.9%.
Strong Record of Earnings Surprises
Ingevity has exceeded the Zacks Consensus Estimate in three out of the last four quarters, achieving an impressive average earnings surprise of about 95.4% during this period.
Outstanding Return on Equity (ROE)
Return on Equity (ROE) measures how efficiently a company uses its shareholders’ funds. Currently, Ingevity boasts an ROE of 24.5%, surpassing the industry standard of 16.1%.
Strategic Changes and Acquisitions Supporting Growth
Ingevity is taking deliberate steps to enhance capacity and foster long-term growth. The company is committed to organic investment and aims to maximize value from its offerings.
The upcoming repositioning of its Performance Chemicals segment aims to reduce its reliance on lower-margin markets. This strategy involves consolidating operations at the North Charleston facility, relocating oleo chemical refining to its secondary refinery, and closing the Crossett facility. These changes will streamline manufacturing and yield anticipated annual savings of $20-$25 million starting in 2025.
The benefits of this repositioning have already begun to emerge, and over the next several quarters, Ingevity will focus on executing its plans to maximize gains. Increased operational efficiency and reduced input costs are also enhancing the Performance Materials segment.
Furthermore, acquiring the Capa caprolactone business has provided Ingevity with a strong technological platform. This unit targets high-growth applications, and in July 2024, Ingevity expanded its distribution network in Europe by partnering with Ultrapolymers Group for Capa Bioplastics. The acquisition of Ozark Materials has solidified the company’s role in the paving construction sector.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
NGVT’s Zacks Ranking and Other Noteworthy Stocks
Currently, NGVT holds a Zacks Rank #2 (Buy).
Additional top-ranked stocks in the Basic Materials sector include Methanex Corporation (MEOH), Axalta Coating Systems Ltd. (AXTA), and DuPont de Nemours, Inc. (DD), all rated Zacks Rank #2. You can view the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Methanex’s earnings has surged by 20.7% over the past 60 days. MEOH has outperformed consensus estimates for the past four quarters, achieving an average surprise of 101%, and its shares have increased by roughly 7% over the last year.
For Axalta Coating, the current earnings estimate stands at $2.15, reflecting a 36.9% increase from last year. Additionally, its projections have grown by 3.9% over the past 60 days, with stock gains of approximately 17% this year.
DuPont has also surpassed earnings estimates in the last four quarters, averaging a surprise of 12.9%, with its stock appreciating around 14% in the past year.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
