Ingevity Corporation NGVT recently announced plans to explore strategic alternatives for its Performance Chemicals Industrial Specialties product line, including a potential divestiture of a portion of the company’s North Charleston site. Although this process includes all Industrial Specialties pine chemical-based chemistries and the North Charleston crude tall oil refinery, this will exclude the Performance Chemicals Road Technologies product line, nor certain lignin-based products currently being reported under Ingevity’s Industrial Specialties product line.

This aggressive action is aimed at increasing its shareholder value by enabling the company to focus on higher growth and margin opportunities within NGVT’s portfolio while improving its earnings and cash flow profile. 

This review will also evaluate the rest of NGVT’s portfolio and ensure a well-aligned cost structure. The company has also assured that during the review process and the resultant steps, it will not cause disruption in providing exceptional service and support to the company’s Industrial Specialties customers. NGVT cannot assure its strategic review will lead to a transaction. 

The company also disclosed its unaudited preliminary financial results for fiscal 2024, subject to the completion of its fiscal year financial audit. Ingevity expects to report net sales of approximately $1.4 billion and an adjusted EBITDA of approximately $360 million. Free cash flow is anticipated to be more than $40 million. 

This achievement, driven by the ongoing positive impact of the Performance Chemicals segment repositioning and the continued strong performance of the Performance Materials unit, indicates that the company has gained positive momentum. This has increased confidence in its ability to deliver modestly above $400 million of adjusted EBITDA in fiscal 2025, excluding any potential impact from the exploration of strategic alternatives.

NGVT’s shares have gained 8.6% in the past year against a decline of 17.1% in its industry.

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NGVT’s Zacks Rank and Key Picks

NGVT currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, Royal Gold Inc. RGLD and Fortuna Mining Corp. FSM. While CRS and RGLD sport a Zacks Rank #1 (Strong Buy) at present, FSM 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 Carpenter Technology’s current-year earnings is pegged at $6.77 per share. CRS beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average earnings surprise being 14.1%. CRS’ shares have soared 207.1% in the past year.

The Zacks Consensus Estimate for Royal Gold’s current-year earnings is pegged at $5.16 per share. RGLD surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed it once, with an average earnings surprise of 9.75%. The stock has gained 18.6% in the past year.

The Zacks Consensus Estimate for Fortuna Mining’s current-year earnings is pegged at 53 cents per share, indicating a year-over-year rise of 140.9%. FSM’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while missing in the other two, with an average earnings surprise of 53.6%. The stock has gained 38% in the past year.




 

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