Investing.com -- BMO Capital upgraded Ingevity (NYSE:NGVT) Corporation to Outperform and raised its price target to $65 in a note Wednesday, citing strong earnings and free cash flow (FCF) growth outlook for 2025 and 2026. 

Analysts believe the stock now offers an attractive risk-reward profile, especially with activist investor Vision One involved.

BMO had previously remained cautious due to uncertainty around a new CEO and potential auto-related tariffs. 

However, analysts now believe that “with an activist (Vision One) now in NGVT, we believe investors are better protected from downside risks and should enjoy the coming lift tied to NGVT's improved EPS/FCF.”

The firm expects a significant earnings inflection beginning in 2025. “We see EBITDA conservatively jumping 12% to $406mn,” BMO analysts wrote, aligning with management’s guidance of $400-$415mn. 

They believe the growth will be driven by the stability in Performance Materials, the recovery in the Performance Chemicals (PC) segment, following asset closures and a shift away from crude tall oil (CTO), and modest improvements in the Advanced Polymer Technologies (APT) segment.

By 2026, BMO forecasts EBITDA to rise another 9%, supported by a return to growth in Perf Mats, an improving auto sector, and continued strength in PC and APT. As a result, EPS is projected to climb from $3.58 in 2024 to $4.78 in 2025 (+33%) and $5.77 in 2026 (+21%).

With a 7.7x multiple on projected 2026 EBITDA of $443mn, BMO sees substantial upside potential for the stock.

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