Chemours (CC) Up 25% in 6 Months: What's Driving the Stock?
The Chemours Company’s CC shares have popped 24.7% over the past six months. The chemical maker has also outperformed its industry’s rise of 1.5% over the same time frame. Moreover, it has topped the S&P 500’s 13.7% rise over the same period.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
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What’s Working in CC’s Favor?
Chemours is benefiting from a recovery in demand from the coronavirus-induced slowdown, strong execution and its cost-reduction measures. The company is seeing demand revival across all markets and regions on the global macroeconomic recovery. Forecast-topping earnings performance in second-quarter 2021 has also contributed to the run-up in the company’s shares.
The company’s adjusted earnings of $1.20 per share for the second quarter topped the Zacks Consensus Estimate of 89 cents. Net sales climbed around 51% year over year to $1,655 million, also beating the Zacks Consensus Estimate of $1,513.9 million.
Chemours, in its second-quarter call, said that it expects adjusted EBITDA and adjusted earnings for 2021 toward the higher end of its previously disclosed guidance ranges, owing to the strong second-quarter results and the ongoing business momentum.
Chemours is gaining from increasing adoption of the Opteon platform. It remains is committed toward driving Opteon adoption. The company is seeing higher demand for Opteon in mobile and stationery applications. It is ramping up production at the new low-cost Opteon Corpus Christi facility.
The company also stands to gain from its efforts to reduce costs. It is undertaking actions to cut costs by reducing overhead, discretionary spend and capital expenditures. The company’s cost-reduction program along with its productivity and operational improvement actions across its businesses are expected to support margins in 2021.
Earnings estimates for Chemours have also been going up over the past two months. The Zacks Consensus Estimate for 2021 has increased 18.3%. The consensus estimate for third-quarter 2021 has also been revised 26% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
The Chemours Company Price and Consensus
The Chemours Company price-consensus-chart | The Chemours Company Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, ArcelorMittal MT and AdvanSix Inc. ASIX, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of 489.2% for the current year. The company’s shares have surged around 153% in a year.
ArcelorMittal has an expected earnings growth rate of 1,731.2% for the current year. The company’s shares have shot up around 178% in the past year.
AdvanSix has an expected earnings growth rate of around 160.4% for the current year. The company’s shares have gained roughly 148% in the past year.
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