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Why You Should Add Kronos Worldwide (KRO) to Your Portfolio Now
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Kronos Worldwide, Inc.’s (KRO - Free Report) shares have popped around 31% over the past six months. It is expected to benefit from higher demand for titanium dioxide (TiO2) and easing pricing pressure this year. Cost-reduction initiatives are also expected to support margins.
We are positive about KRO’s prospects and believe that the time is right for you to add the stock to your portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock a compelling choice for investors right now.
KRO Outperforms Industry
KRO has outperformed the industry it belongs to over the past year. The company’s shares have rallied 41.4% compared with a 7.4% decline of the industry.
Image Source: Zacks Investment Research
Solid Earnings Growth Prospects
The Zacks Consensus Estimate for earnings for 2024 for Kronos Worldwide is currently pegged at 96 cents, reflecting an expected year-over-year growth of 323.3%. Moreover, earnings are expected to register a 300% growth in third-quarter 2024.
Earnings Estimates Northbound
Earnings estimates for KRO have been going up over the past 60 days. The Zacks Consensus Estimate for 2024 has increased by 12.9%. The consensus estimate for the third quarter has also been revised 16.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Higher TiO2 Demand, Cost Actions Drive KRO
Kronos is well-positioned to gain from higher demand for TiO2 in major markets. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.
The company expects sales volumes in 2024 to exceed 2023 levels factoring in the recently experienced improved demand and expectations that demand will continue to improve this year.
Kronos Worldwide is also taking actions to reduce costs and align production and inventories to expected demand levels, which are expected to support its margins. It has increased its production rates in sync with current and expected near-term demand improvement. It expects its production rates for the balance of 2024 to be higher than the level witnessed in 2023.
Moreover, the company’s internal cost initiatives are expected to continue to support margins in 2024. Reduced energy costs along with its cost-cutting initiatives and the realization of selling price increases are likely to result in improved margins on a year-over-year basis this year. The company has undertaken TiO2 selling price hikes, which need to be sustained to attain margins in line with historical levels. KRO expects to report higher operating results on a year-over-year basis for full-year 2024 based on the expected improved demand, higher selling prices and reduced production costs.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75.2% from year-ago levels. The consensus estimate for NEM’s earnings has increased 16% in the past 60 days. The stock has rallied around 32% in the past year.
The consensus estimate for Element Solutions’ current-year earnings has increased by 0.7% in the past 60 days. ESI beat the consensus estimate in three of the last four quarters. In this timeframe, it delivered an earnings surprise of around 3.8%, on average.
The Zacks Consensus Estimate for Agnico Eagle’s current-year earnings is pegged at $3.65, indicating a year-over-year rise of 63.7%. AEM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 15.7%. The company’s shares have rallied roughly 73% in the past year.
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Why You Should Add Kronos Worldwide (KRO) to Your Portfolio Now
Kronos Worldwide, Inc.’s (KRO - Free Report) shares have popped around 31% over the past six months. It is expected to benefit from higher demand for titanium dioxide (TiO2) and easing pricing pressure this year. Cost-reduction initiatives are also expected to support margins.
We are positive about KRO’s prospects and believe that the time is right for you to add the stock to your portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock a compelling choice for investors right now.
KRO Outperforms Industry
KRO has outperformed the industry it belongs to over the past year. The company’s shares have rallied 41.4% compared with a 7.4% decline of the industry.
Image Source: Zacks Investment Research
Solid Earnings Growth Prospects
The Zacks Consensus Estimate for earnings for 2024 for Kronos Worldwide is currently pegged at 96 cents, reflecting an expected year-over-year growth of 323.3%. Moreover, earnings are expected to register a 300% growth in third-quarter 2024.
Earnings Estimates Northbound
Earnings estimates for KRO have been going up over the past 60 days. The Zacks Consensus Estimate for 2024 has increased by 12.9%. The consensus estimate for the third quarter has also been revised 16.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Higher TiO2 Demand, Cost Actions Drive KRO
Kronos is well-positioned to gain from higher demand for TiO2 in major markets. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.
The company expects sales volumes in 2024 to exceed 2023 levels factoring in the recently experienced improved demand and expectations that demand will continue to improve this year.
Kronos Worldwide is also taking actions to reduce costs and align production and inventories to expected demand levels, which are expected to support its margins. It has increased its production rates in sync with current and expected near-term demand improvement. It expects its production rates for the balance of 2024 to be higher than the level witnessed in 2023.
Moreover, the company’s internal cost initiatives are expected to continue to support margins in 2024. Reduced energy costs along with its cost-cutting initiatives and the realization of selling price increases are likely to result in improved margins on a year-over-year basis this year. The company has undertaken TiO2 selling price hikes, which need to be sustained to attain margins in line with historical levels. KRO expects to report higher operating results on a year-over-year basis for full-year 2024 based on the expected improved demand, higher selling prices and reduced production costs.
Kronos Worldwide Inc Price and Consensus
Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote
Stocks to Consider
Other top-ranked stocks in the Basic Materials space are Newmont Corporation (NEM - Free Report) , Element Solutions Inc (ESI - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) . Newmont and Element Solutions sport a Zacks Rank #1 (Strong Buy), and Agnico Eagle carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75.2% from year-ago levels. The consensus estimate for NEM’s earnings has increased 16% in the past 60 days. The stock has rallied around 32% in the past year.
The consensus estimate for Element Solutions’ current-year earnings has increased by 0.7% in the past 60 days. ESI beat the consensus estimate in three of the last four quarters. In this timeframe, it delivered an earnings surprise of around 3.8%, on average.
The Zacks Consensus Estimate for Agnico Eagle’s current-year earnings is pegged at $3.65, indicating a year-over-year rise of 63.7%. AEM’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 15.7%. The company’s shares have rallied roughly 73% in the past year.