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Innospec (IOSP) Up 19% in a Year: What's Driving the Stock?
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Innospec Inc.’s (IOSP - Free Report) shares have gained 18.9% in the past year. The company also outperformed the industry’s fall of 13.5%.
Image Source: Zacks Investment Research
Let’s take a look at the factors driving the stock’s price appreciation.
Strategic Expansion and QGP Acquisition Fuel Optimism
Innospec, carrying a Zacks Rank #3 (Hold), is capitalizing on its robust Performance Chemicals segment and strategic growth initiatives. The company is dedicated to advancing technology development and enhancing margins to drive organic growth across its diverse business portfolio.
In the first quarter, Innospec reported adjusted earnings per share of $1.75, up from $1.38 in the previous year and surpassing the Zacks Consensus Estimate of $1.64. Although revenues saw a 2% decline to $500.2 million from prior-year levels and missed the Zacks Consensus Estimate of $508 million, the Performance Chemicals segment showed consistently strong performance. The segment's operating income more than doubled year over year, driven by increased sales and improved gross margins.
The acquisition of QGP Quimica Geral in Brazil expands Innospec’s global footprint and manufacturing capabilities, enhancing customer service in South America. QGP's specialty chemistry expertise, particularly in growth markets like Agriculture, complements Innospec's existing portfolio. This acquisition aligns with Innospec's M&A strategy, bolstering the Performance Chemicals segment and establishing a manufacturing base in South America. Innospec emphasized its debt-free balance sheet following the takeover, positioning the company well for future M&A activities, shareholder returns and strategic organic growth investments.
During its first-quarter call, Innospec highlighted a broad array of technology-driven organic opportunities across its business segments. These factors are expected to continue driving growth and margin improvement. With significant flexibility and balance sheet strength, Innospec is well-positioned for potential dividend growth, stock buybacks, mergers and acquisitions and further organic investments.
Stocks to Consider
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Axalta carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 89.2% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have gone up 10% in the last 60 days. EGO beat the consensus estimate in each of the last four quarters, the average earnings surprise being 430.7%. The stock has rallied 47.4% in the past year.
The Zacks Consensus Estimate for Axalta's current-year earnings is pegged at $1.99, indicating a rise of 26.8% from year-ago levels. AXTA beat the consensus in three of the last four quarters while missing it once, the average earnings surprise being 7%. The stock has rallied nearly 2.8% in the past year.
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Innospec (IOSP) Up 19% in a Year: What's Driving the Stock?
Innospec Inc.’s (IOSP - Free Report) shares have gained 18.9% in the past year. The company also outperformed the industry’s fall of 13.5%.
Image Source: Zacks Investment Research
Let’s take a look at the factors driving the stock’s price appreciation.
Strategic Expansion and QGP Acquisition Fuel Optimism
Innospec, carrying a Zacks Rank #3 (Hold), is capitalizing on its robust Performance Chemicals segment and strategic growth initiatives. The company is dedicated to advancing technology development and enhancing margins to drive organic growth across its diverse business portfolio.
In the first quarter, Innospec reported adjusted earnings per share of $1.75, up from $1.38 in the previous year and surpassing the Zacks Consensus Estimate of $1.64. Although revenues saw a 2% decline to $500.2 million from prior-year levels and missed the Zacks Consensus Estimate of $508 million, the Performance Chemicals segment showed consistently strong performance. The segment's operating income more than doubled year over year, driven by increased sales and improved gross margins.
The acquisition of QGP Quimica Geral in Brazil expands Innospec’s global footprint and manufacturing capabilities, enhancing customer service in South America. QGP's specialty chemistry expertise, particularly in growth markets like Agriculture, complements Innospec's existing portfolio. This acquisition aligns with Innospec's M&A strategy, bolstering the Performance Chemicals segment and establishing a manufacturing base in South America. Innospec emphasized its debt-free balance sheet following the takeover, positioning the company well for future M&A activities, shareholder returns and strategic organic growth investments.
During its first-quarter call, Innospec highlighted a broad array of technology-driven organic opportunities across its business segments. These factors are expected to continue driving growth and margin improvement. With significant flexibility and balance sheet strength, Innospec is well-positioned for potential dividend growth, stock buybacks, mergers and acquisitions and further organic investments.
Stocks to Consider
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Axalta Coating Systems Ltd. (AXTA - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Axalta carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 89.2% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have gone up 10% in the last 60 days. EGO beat the consensus estimate in each of the last four quarters, the average earnings surprise being 430.7%. The stock has rallied 47.4% in the past year.
The Zacks Consensus Estimate for Axalta's current-year earnings is pegged at $1.99, indicating a rise of 26.8% from year-ago levels. AXTA beat the consensus in three of the last four quarters while missing it once, the average earnings surprise being 7%. The stock has rallied nearly 2.8% in the past year.