Univar Solutions Inc. UNVR has reached an agreement with Vink Chemicals, a specialty biocide and biocidal products maker, to distribute a portfolio of biocides in Brazil.
The new authorization from Vink includes brands for a wide range of industries like energy, performance chemicals, homecare and industrial cleaning. It also includes sealants, coatings, adhesives and elastomers.
Univar will now supply Vink’s brands like Vinkocide, Grotanol, Parmetol, Grotan, Stabicor and Grotamar in Brazil. Application areas include film preservation of paints and varnishes, construction chemicals, coolants, in-water treatment, cleaners, detergents and disinfectants for the polymer industry.
Per management, Vink’s in-depth biocide knowledge and technologies combined with the different product lines from the Univar’s portfolio will provide customers with a comprehensive approach to develop next-generation end products.
Univar’s shares have lost 25.4% over a year compared with 18.8% decline recorded by its industry.
In first-quarter 2020 earnings call, Univar withdrew its adjusted EBITDA guidance for 2020 due to the impacts of the coronavirus outbreak. The company also reduced its expected capital expenditures to $95-$115 million from $120-$130 million for the year.
Univar is expected to gain from its continuous market expansion and acquisitions. The buyout of Nexeo Solutions enhances its capabilities and accelerates the company’s ability to create significant value for customers, supplier partners, employees and shareholders. The company is also focused on cost management and productivity actions, which are supporting its margins.
However, Univar is exposed to headwind from a sluggish demand environment. Weak demand from global industrial end markets is likely to exert pressure on volumes.
Zacks Rank & Key Picks
Univar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Sandstorm Gold Ltd SAND, Harmony Gold Mining Company Limited HMY and AngloGold Ashanti Limited AU, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Sandstorm Gold has an expected earnings growth rate of 33.3% for 2020. The company’s shares have surged 71.8% in the past year.
Harmony Gold has an expected earnings growth rate of 28.6% for fiscal 2020. Its shares have returned 87.7% in the past year.
AngloGold has an expected earnings growth rate of 109.9% for 2020. The company’s shares have surged 71.3% in the past year.
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