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Why You Should Add Element Solutions (ESI) to Your Portfolio
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Element Solutions Inc.'s (ESI - Free Report) stock looks promising at the moment. The company is benefiting from acquisitions, cost actions and strong demand in most of its end-use markets.
We are positive on the company’s prospects and believe that the time is right for to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let’s take a look at the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.
Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for Element Solutions for 2022 has increased around 2.6%. The consensus estimate for 2023 has also been revised 1.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for 2022 for Element Solutions is currently pegged at $1.58, reflecting an expected year-over-year growth of 14.5%. Earnings are also expected to register a 15% growth in 2023.
Positive Earnings Surprise History
Element Solutions has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 4.6%, on average.
Upbeat Prospects
Element Solutions is benefiting from strategic acquisitions, cost management measures and strong demand in its end markets. It is seeing continued strength in its high-end electronics business. The company benefited from strong demand across many of its major end-markets in the first quarter, leading to a 24% year-over-year rise in its top line. It is also seeing strong demand in general industrial and energy markets. It is benefiting from strength in construction, general manufacturing and aerospace end markets, which is offsetting weakness in automotive.
The company also stands to benefit from strategic acquisitions. The acquisition of H.K. Wentworth is expected to boost growth in its electronics portfolio. The buyout of Coventya also expands its offerings across industrial surface treatment markets and offer significant synergies. The recently completed HSO buyout also adds technology to the company’s industrial surface treatment business.
Moreover, the Kester acquisition has added capabilities and scale to the company’s existing electronics assembly materials business. The acquisition of DMP has also expanded Element Solutions’ investment in technology to offer innovative solutions. The cash proceeds from the divestment of its Agricultural Solution Unit have also enabled Element Solutions to invest in strategic markets and pursue mergers and acquisitions.
Element has been executing various reorganization and cost management measures that have contributed to cost savings and profits. Continued cost discipline and other strategic actions are expected to support margins and act as tailwinds in 2022.
The company is also using its cash strategically and remains committed to boosting shareholders' returns. It deployed $43 million of capital in the first quarter. The remaining availability under its current stock buyback authorization was $713 million at the end of the first quarter. The company also anticipates generating free cash flow of between $310-$325 million for 2022. It continues to look for opportunities to deploy excess capital.
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Albemarle Corporation (ALB - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 22.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 35% in a year.
Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 116.1% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 31% in a year. The company flaunts a Zacks Rank #1.
Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 8% over a year.
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Why You Should Add Element Solutions (ESI) to Your Portfolio
Element Solutions Inc.'s (ESI - Free Report) stock looks promising at the moment. The company is benefiting from acquisitions, cost actions and strong demand in most of its end-use markets.
We are positive on the company’s prospects and believe that the time is right for to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let’s take a look at the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.
Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for Element Solutions for 2022 has increased around 2.6%. The consensus estimate for 2023 has also been revised 1.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for 2022 for Element Solutions is currently pegged at $1.58, reflecting an expected year-over-year growth of 14.5%. Earnings are also expected to register a 15% growth in 2023.
Positive Earnings Surprise History
Element Solutions has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 4.6%, on average.
Upbeat Prospects
Element Solutions is benefiting from strategic acquisitions, cost management measures and strong demand in its end markets. It is seeing continued strength in its high-end electronics business. The company benefited from strong demand across many of its major end-markets in the first quarter, leading to a 24% year-over-year rise in its top line. It is also seeing strong demand in general industrial and energy markets. It is benefiting from strength in construction, general manufacturing and aerospace end markets, which is offsetting weakness in automotive.
The company also stands to benefit from strategic acquisitions. The acquisition of H.K. Wentworth is expected to boost growth in its electronics portfolio. The buyout of Coventya also expands its offerings across industrial surface treatment markets and offer significant synergies. The recently completed HSO buyout also adds technology to the company’s industrial surface treatment business.
Moreover, the Kester acquisition has added capabilities and scale to the company’s existing electronics assembly materials business. The acquisition of DMP has also expanded Element Solutions’ investment in technology to offer innovative solutions. The cash proceeds from the divestment of its Agricultural Solution Unit have also enabled Element Solutions to invest in strategic markets and pursue mergers and acquisitions.
Element has been executing various reorganization and cost management measures that have contributed to cost savings and profits. Continued cost discipline and other strategic actions are expected to support margins and act as tailwinds in 2022.
The company is also using its cash strategically and remains committed to boosting shareholders' returns. It deployed $43 million of capital in the first quarter. The remaining availability under its current stock buyback authorization was $713 million at the end of the first quarter. The company also anticipates generating free cash flow of between $310-$325 million for 2022. It continues to look for opportunities to deploy excess capital.
Element Solutions Inc. Price and Consensus
Element Solutions Inc. price-consensus-chart | Element Solutions Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , Albemarle Corporation (ALB - Free Report) and Cabot Corporation (CBT - Free Report) .
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 22.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 35% in a year.
Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 116.1% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 31% in a year. The company flaunts a Zacks Rank #1.
Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 8% over a year.