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Univar (UNVR) Gains on Cost Reductions, Nexeo Acquisition

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Univar Solutions Inc. is benefiting from cost-reduction actions, chemical price inflation and the Nexeo acquisition.

Univar is well placed to gain from consistent market expansion and acquisitions. Notably, the acquisition of Nexeo Solutions will enhance capabilities and accelerate its ability to create significant value for customers, supplier partners, employees and shareholders. Univar is progressing well with the integration of Nexeo. The company expects to achieve annual net synergy from Nexeo of $120 million by early 2022.

Moreover, Univar is focused on cost-cutting, expense management and productivity actions, which are helping the company minimize operational costs and boost margins. It is taking a number of actions to reduce costs in the wake of the coronavirus pandemic, including reduction in travel and other discretionary spending.

The company is also poised to benefit from chemical price inflation due to disruption in the supply chain. Univar saw higher gross margins across all segments in the first quarter, partly driven by price inflation. It expects to continue to benefit from chemical price inflation in the second quarter of 2021 amid persistent supply chain disruptions.

Shares of Univar have gained 74.5% in the past year compared with 58.9% rise of the industry.

Other Stocks to Consider

Univar currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - Free Report) and Cabot Corporation (CBT - Free Report) .

Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 79.7% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of around 229.3% for the current year. The company’s shares have gained 137% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have surged 71.4% in the past year. It currently flaunts a Zacks Rank #1.

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