Chemours (CC) Gains on Opteon Adoption Amid Demand Woes
The Chemours Company CC is gaining from higher adoption of its Opteon refrigerants, strong execution, higher pricing and cost-cutting measures amid challenges from slow demand recovery.
The company’s shares are down 13.5% over a year, compared with 1.4% rise recorded by its industry.
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Chemours, a Zacks Rank #3 (Hold) stock, is witnessing strong adoption of the Opteon platform, which is supporting volumes in the Thermal & Specialized Solutions segment. Volumes increased 10% in this unit in the first quarter of 2023 on the continued adoption of Opteon. Chemours remains committed toward driving Opteon adoption. Higher prices are also contributing to the segment’s sales. CC is also seeing higher prices in the Titanium Technologies division.
Moreover, the company is gaining from its efforts to reduce costs. Its cost-reduction program along with its productivity and operational improvement actions across its businesses are expected to support its margins in 2023. It is also taking appropriate pricing measures to counter cost inflation in raw materials.
The company also remains focused on boosting its cash flows and returning value to shareholders. It generated cash from operating activities of $754 million and free cash flow of $447 million in 2022. It also paid dividends worth $154 million and returned $495 million through share repurchases during the year. CC also repurchased $14 million of common stock and paid dividends worth $37 million in the first quarter. It expects to generate free cash flow of more than $350 million in 2023.
However, continued softness in advanced materials is likely to weigh on volumes in the Advanced Performance Materials segment. The company expects demand to remain weak in advanced materials for products that serve economically sensitive end markets. Its shift to higher value and differentiated products has also resulted in weaker demand in non-strategic end markets.
Although destocking in China and Europe has largely ended, the pace of demand recovery is expected to be modest over the near term, given the weak global economic recovery and continued macroeconomic uncertainties. This is likely to impact volumes in The Titanium Technologies segment in the second quarter.
The Chemours Company Price and Consensus
The Chemours Company price-consensus-chart | The Chemours Company Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include L.B. Foster Company FSTR, Gold Fields Limited GFI, and Linde plc LIN.
L.B. Foster currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR has gained around 12% in a year.
Gold Fields currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for GFI’s current-year earnings has been revised 4% upward in the past 60 days.
The consensus estimate for current-year earnings for GFI is currently pegged at $1.05, reflecting an expected year-over-year growth of 8.3%. Gold Fields’ shares have popped roughly 66% in the past year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.4% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have gained roughly 23% in the past year.
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The Chemours Company (CC) : Free Stock Analysis Report
