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Why You Should Add AkzoNobel (AKZOY) Stock to Your Portfolio

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AkzoNobel N.V.’s (AKZOY - Free Report) shares are up around 22% year to date.  We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

Let's see what makes this Zacks Rank #1 (Strong Buy) stock a compelling investment option at the moment.

An Outperformer

Shares of AkzoNobel have gained 31.4% over a year against the 12% rise of its industry. It has also outperformed the S&P 500’s roughly 14.2% rise over the same period.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Estimates Northbound

Over the past two months, the Zacks Consensus Estimate for AkzoNobel for 2023 has increased around 2.9%. The consensus estimate for 2024 has also been revised 3.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Strong Growth Prospects

The Zacks Consensus Estimate for earnings for 2023 for AkzoNobel is currently pegged at $1.44, reflecting an expected year-over-year growth of 67.4%. Earnings are also expected to register a 16% growth in 2024.

Strategic Actions to Aid Results

AkzoNobel remains exposed to pressure on volumes from the ongoing macro-economic uncertainties. However, it is taking actions to manage margins, improve operational efficiency, reduce costs, normalize working capital and de-leverage its balance sheet.

The company is also taking measures to improve its operations, grow through strategic acquisitions and deliver innovative solutions to customers. Its vast geographic footprint and leading positions in many market segments provide it opportunities for growth amid a challenging macro-economic landscape. AKZOY further expanded its significant presence in Latin America with the acquisition of Colombia-based paints and coatings company, Grupo Orbis in 2022. It also has a strong foothold in the South Asia Pacific region.

Moreover, AkzoNobel sees its cost-cutting actions to mitigate the sustained pressure from inflation in operating costs this year. Lower raw material costs are also expected to favorably impact AKZOY’s profitability in 2023. The company’s supply-chain improvement initiatives and actions to manage working capital are expected to drive cash generation and strengthen its balance sheet.

 

Akzo Nobel NV Price and Consensus

 

Akzo Nobel NV Price and Consensus

Akzo Nobel NV price-consensus-chart | Akzo Nobel NV Quote

 

Stocks to Consider

Other top-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Hawkins, Inc. (HWKN - Free Report) and PPG Industries, Inc. (PPG - Free Report) .

The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 92% in a year.

Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.

Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 64% in a year.

PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.

PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 15% in a year.

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