The Chemours Company
’s
CC
shares have shot up 30.4% over the past three months. The company has also outperformed its
industry
’s rise of 12.9% to over the same time frame.
Chemours, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $4.4 billion and average volume of shares traded in the last three months is around 1,064.7K.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Favoring CC?
Chemours is gaining from a recovery in demand from the coronavirus-induced slowdown and its cost-reduction measures. It delivered forecast-topping results in the third quarter on the back of demand recovery, cost-cutting actions and strong execution.
In its Fluoroproducts segment, the company is seeing improved customer demand for refrigerants, especially in the automotive sector on a rebound in automotive OEM production rates. It is also witnessing demand recovery in architectural coatings, laminates and plastics markets in its Titanium Technologies segment. The company is seeing a recovery across all markets and regions.
Chemours is also poised to benefit from increasing adoption of the Opteon platform and growing applications of fluoropolymers, especially in automotive, electronics and energy end-markets. The company is seeing higher demand for Opteon in mobile applications. It remains committed to drive Opteon adoption. It is ramping up production at the new low-cost Opteon Corpus Christi facility.
Moreover, the company stands to gain from its efforts to reduce costs. It is taking actions to cut costs by reducing overhead, discretionary spend and capital expenditure for 2020. These actions are helping it to generate strong cash flows. Chemours aims to cut costs by $160 million and capital expenditure by roughly $125 million in 2020. The company’s cost and operational improvement actions across its businesses are expected to support margins in 2020.
The company also has a strong liquidity position. It ended the third quarter with cash and cash equivalents of $956 million and total liquidity of $1.7 billion.
Earnings estimate revisions also have the greatest impact on stock prices. Over the past month, the Zacks Consensus Estimate for Chemours for the current year has increased around 15%. The consensus estimate for 2021 has also been revised 17.1% upward over the same time frame.
The Chemours Company Price and Consensus
The Chemours Company price-consensus-chart
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The Chemours Company Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include
Bunge Limited
BG
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Bunge has an expected earnings growth rate of 43% for the current year. The company’s shares have gained around 15% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have rallied around 29% in the past year. It currently carries a Zacks Rank #2.
BHP Group has a projected earnings growth rate of 32.4% for the current fiscal year. The company’s shares have gained around 18% in a year. It currently carries a Zacks Rank #2.
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