We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ICL Group Rallies 31% in 3 Months: Time to Snap Up the Stock?
Read MoreHide Full Article
ICL Group Ltd’s (ICL - Free Report) shares have rallied 31% in the past three months, significantly outperforming the Zacks Fertilizers industry’s rise of 3%. The bullishness partly reflects its forecast-topping third-quarter 2024 results on the back of strong growth in its specialties-driven segments and upwardly revised guidance for the full year.
Technical indicators for ICL show bullish momentum. The stock broke out above its 200-day simple moving average (SMA) on Nov. 21, 2024. It is also trading above the 50-day SMA since Nov. 1, 2024. Notably, following a golden crossover on Dec. 23, 2024, the 50-day SMA continues to read higher than the 200-day moving average, manifesting a bullish trend.
ICL Shares Trade Above 50-day SMA
Image Source: Zacks Investment Research
Is the time right to buy ICL’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Strategic Investments, Cost Actions & Acquisitions Aid ICL
ICL, which is engaged in the fertilizer and specialty chemical sectors, remains focused on growing its specialties businesses. It focuses on boosting operating efficiency and productivity, expanding customer agreements, strategic acquisitions, and launching innovative solutions.
ICL’s cost-saving and efficiency efforts are driving significant margin expansion. It saw a significant year-over-year improvement in EBITDA in its three specialties-driven businesses in the third quarter of 2024. It also delivered a fourth straight quarter of sequential EBITDA improvement in the third quarter. ICL raised its guidance for full-year 2024 and now sees specialties-driven EBITDA of between $0.95-$1.05 billion, up from the previous guidance of $0.8-$1 billion.
The acquisition of Nitro 1000 allowed ICL to expand its market position and leadership in Brazil's specialty plant nutrition. The buyout of Custom Ag Formulators also expanded its global Growing Solutions business. The opening of a new food specialty plant in China also strengthens relationships with existing customers while exploring new business opportunities in the country. The expansion enables ICL to engage directly with Chinese consumers and deliver high-quality products that support customer success in the competitive Chinese market.
The company, last month, entered into a joint venture (JV) agreement with Shenzhen Dynanonic Co., Ltd. to produce lithium iron phosphate (“LFP”) cathode active material in Europe, with an initial investment of roughly €285 million (roughly $297 million). LFP is crucial to the future of Europe's energy transition. A new plant at ICL's Sallent, Spain, site is being planned, which will significantly expand the company's battery materials business. The initiative illustrates ICL's efforts to produce high-quality solutions for a sustainable supply chain and marks a substantial move to expand the company's battery materials range in Europe.
ICL, in late 2024, announced a follow-on investment in Plantible Foods, as part of its Series B capital round. This investment expands on ICL's earlier involvement in Plantible's Series A round, extending the two firms' strategic relationship. ICL's investment in Plantible Foods demonstrates its commitment to developing sustainable and innovative food-sector solutions. The development of breakthrough ingredients, such as Rovitaris Binding Solution, is aligned with industry trends and helps position ICL to meet changing customer preferences and capitalize on new opportunities.
The company also unveiled VeriQuel R100, an innovative phosphorus-based product. ICL invested more than $2 million in research and development for this solution, which provides a greener option compared with traditional addition flame retardants. With the growing demand for environmentally friendly building materials, VeriQuel R100 will be essential in providing a high-performing, sustainable solution without compromising fire safety.
Sound Financial Health Bodes Well for ICL Stock
ICL has a healthy balance sheet and generates substantial cash flows, which allows it to drive shareholder value and fund growth initiatives. The company ended the third quarter of 2024 with cash and cash equivalents of $393 million, up around 28% year over year. It ended the quarter with available liquidity of $1,749 million. The company generated an operating cash flow of $408 million in the quarter.
ICL offers a healthy dividend yield of 2.1% (above the S&P 500′s average dividend yield of roughly 2%) at the current stock price. Its payout ratio is 37% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of roughly 24.8%. The company's dividend is perceived to be safe and reliable, backed by strong cash flows and sound financial health.
Earnings estimates for ICL have been going up over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2024 and 2025 has been revised upward over the same time frame.
Image Source: Zacks Investment Research
ICL Trades at a Modest Premium
ICL is currently trading at a forward P/E of 14.22X, higher than its five-year median. It represents a roughly 1.6% premium when stacked up with the industry average of 13.99X.
Image Source: Zacks Investment Research
ICL Stock Outperforms Industry and S&P 500
ICL’s shares have rallied 38% in the past six months, outperforming the industry’s rise of 2.9% and the S&P 500’s increase of 7.6%. Its peers, Nutrien Ltd. (NTR - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , have gained 8.3% and 3.7%, respectively, while The Mosaic Company (MOS - Free Report) has lost 10.1% over the same period.
ICL’s 6-Month Price Performance
Image Source: Zacks Investment Research
Final Thoughts: Accumulate ICL Shares
With solid financial health and bullish technicals, ICL presents a compelling investment case. Rising earnings estimates and a healthy dividend yield are other positives. The company’s strategic investment in building its innovative product pipeline, efforts to grow through acquisitions and cost and efficiency initiatives also augur well. We recommend that investors add this Zacks Rank #2 (Buy) stock as it has upbeat prospects.
Image: Bigstock
ICL Group Rallies 31% in 3 Months: Time to Snap Up the Stock?
ICL Group Ltd’s (ICL - Free Report) shares have rallied 31% in the past three months, significantly outperforming the Zacks Fertilizers industry’s rise of 3%. The bullishness partly reflects its forecast-topping third-quarter 2024 results on the back of strong growth in its specialties-driven segments and upwardly revised guidance for the full year.
Technical indicators for ICL show bullish momentum. The stock broke out above its 200-day simple moving average (SMA) on Nov. 21, 2024. It is also trading above the 50-day SMA since Nov. 1, 2024. Notably, following a golden crossover on Dec. 23, 2024, the 50-day SMA continues to read higher than the 200-day moving average, manifesting a bullish trend.
ICL Shares Trade Above 50-day SMA
Is the time right to buy ICL’s shares for potential upside? Let’s take a look at the stock’s fundamentals.
Strategic Investments, Cost Actions & Acquisitions Aid ICL
ICL, which is engaged in the fertilizer and specialty chemical sectors, remains focused on growing its specialties businesses. It focuses on boosting operating efficiency and productivity, expanding customer agreements, strategic acquisitions, and launching innovative solutions.
ICL’s cost-saving and efficiency efforts are driving significant margin expansion. It saw a significant year-over-year improvement in EBITDA in its three specialties-driven businesses in the third quarter of 2024. It also delivered a fourth straight quarter of sequential EBITDA improvement in the third quarter. ICL raised its guidance for full-year 2024 and now sees specialties-driven EBITDA of between $0.95-$1.05 billion, up from the previous guidance of $0.8-$1 billion.
The acquisition of Nitro 1000 allowed ICL to expand its market position and leadership in Brazil's specialty plant nutrition. The buyout of Custom Ag Formulators also expanded its global Growing Solutions business. The opening of a new food specialty plant in China also strengthens relationships with existing customers while exploring new business opportunities in the country. The expansion enables ICL to engage directly with Chinese consumers and deliver high-quality products that support customer success in the competitive Chinese market.
The company, last month, entered into a joint venture (JV) agreement with Shenzhen Dynanonic Co., Ltd. to produce lithium iron phosphate (“LFP”) cathode active material in Europe, with an initial investment of roughly €285 million (roughly $297 million). LFP is crucial to the future of Europe's energy transition. A new plant at ICL's Sallent, Spain, site is being planned, which will significantly expand the company's battery materials business. The initiative illustrates ICL's efforts to produce high-quality solutions for a sustainable supply chain and marks a substantial move to expand the company's battery materials range in Europe.
ICL, in late 2024, announced a follow-on investment in Plantible Foods, as part of its Series B capital round. This investment expands on ICL's earlier involvement in Plantible's Series A round, extending the two firms' strategic relationship. ICL's investment in Plantible Foods demonstrates its commitment to developing sustainable and innovative food-sector solutions. The development of breakthrough ingredients, such as Rovitaris Binding Solution, is aligned with industry trends and helps position ICL to meet changing customer preferences and capitalize on new opportunities.
The company also unveiled VeriQuel R100, an innovative phosphorus-based product. ICL invested more than $2 million in research and development for this solution, which provides a greener option compared with traditional addition flame retardants. With the growing demand for environmentally friendly building materials, VeriQuel R100 will be essential in providing a high-performing, sustainable solution without compromising fire safety.
Sound Financial Health Bodes Well for ICL Stock
ICL has a healthy balance sheet and generates substantial cash flows, which allows it to drive shareholder value and fund growth initiatives. The company ended the third quarter of 2024 with cash and cash equivalents of $393 million, up around 28% year over year. It ended the quarter with available liquidity of $1,749 million. The company generated an operating cash flow of $408 million in the quarter.
ICL offers a healthy dividend yield of 2.1% (above the S&P 500′s average dividend yield of roughly 2%) at the current stock price. Its payout ratio is 37% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of roughly 24.8%. The company's dividend is perceived to be safe and reliable, backed by strong cash flows and sound financial health.
ICL’s Rising Earnings Estimates Reflect Positive Sentiment
Earnings estimates for ICL have been going up over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2024 and 2025 has been revised upward over the same time frame.
ICL Trades at a Modest Premium
ICL is currently trading at a forward P/E of 14.22X, higher than its five-year median. It represents a roughly 1.6% premium when stacked up with the industry average of 13.99X.
ICL Stock Outperforms Industry and S&P 500
ICL’s shares have rallied 38% in the past six months, outperforming the industry’s rise of 2.9% and the S&P 500’s increase of 7.6%. Its peers, Nutrien Ltd. (NTR - Free Report) and Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , have gained 8.3% and 3.7%, respectively, while The Mosaic Company (MOS - Free Report) has lost 10.1% over the same period.
ICL’s 6-Month Price Performance
Final Thoughts: Accumulate ICL Shares
With solid financial health and bullish technicals, ICL presents a compelling investment case. Rising earnings estimates and a healthy dividend yield are other positives. The company’s strategic investment in building its innovative product pipeline, efforts to grow through acquisitions and cost and efficiency initiatives also augur well. We recommend that investors add this Zacks Rank #2 (Buy) stock as it has upbeat prospects.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.