Ingevity Corporation’s (NGVT – Free Report) shares have shot up 23.3% over the past three months. The company has also outperformed the Zacks Chemicals Specialty industry’s decline of 9.8% over the same time frame.
Let’s take a look into the factors that are driving NGVT stock.
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NGVT Gains on Strategic Repositioning and Acquisitions
Ingevity is taking several actions to expand capacity and drive long-term growth. It remains committed to investing organically. Ingevity is also committed to capturing the maximum value for its products.
The company is expected to benefit from the repositioning of its Performance Chemicals segment, which is aimed at lowering exposure to lower-margin end markets. The move includes consolidating segment operations at its North Charleston facility by moving oleo chemical refining to the North Charleston site’s secondary refinery as well as the closure of its Crossett facility. These actions further simplify the segment’s manufacturing footprint and create significant cost savings. NGVT expects this manufacturing consolidation to result in around $20-$25 million in annual savings beginning in 2025.
During the third quarter, the company began to notice the benefits of the repositioning. Ingevity’s focus over the next few quarters will be on execution to ensure that it maximizes the benefits of its approach. Operational improvements leading to lower input costs and better manufacturing efficiency are also aiding performance in its Performance Materials unit.
The acquisition of the Capa caprolactone business enabled the company with a new technology platform to drive revenue and earnings growth. Capa has a strong and market-leading business that focuses on high-growth end-use applications. NGVT, in July 2024, expanded its Capa caprolactone distribution network by selecting Ultrapolymers Group as the distributor for Capa Bioplastics in Europe. The acquisition of Ozark Materials has also strengthened the company’s position in the paving construction industry.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
NGVT’s Zacks Rank & Key Picks
NGVT currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS – Free Report) , ICL Group Ltd (ICL – Free Report) and Gold Royalty Corp. (GROY – Free Report) . While CRS sports a Zacks Rank #1 (Strong Buy), ICL and GROY carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. CRS’ shares have soared 150% in the past year.
The Zacks Consensus Estimate for ICL Group’s current-year earnings has increased by 2.9% in the past 60 days. ICL beat the consensus estimate in each of the last four quarters with the average surprise being 18.1%.
Gold Royalty beat the consensus estimate in three of the trailing four quarters while delivering in-line results on the other occasion. In this time frame, it has delivered an earnings surprise of roughly 125%, on average. GROY has an expected earnings growth rate of 66.7% for the current year.
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