Here's Why You Should Add Ashland (ASH) Stock to Your Portfolio
Ashland Global Holdings Inc. ASH is benefiting from strong demand across its end markets and disciplined pricing actions. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this leading specialty chemicals company an attractive choice for investors right now.
An Outperformer
Shares of Ashland, a Zacks Rank #2 (Buy) stock, have gained 17.3% over the past year against the 13.1% decline of its industry. It has also outperformed the S&P 500’s roughly 2.6% decline over the same period.
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Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for Ashland for fiscal 2022 has increased around 4.7%. The consensus estimate for fiscal 2023 has also been revised 3.5% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for fiscal 2022 for Ashland is currently pegged at $5.12, reflecting an expected year-over-year growth of 36.5%. Moreover, earnings are expected to register a 14.7% growth in fiscal 2023.
Growth Drivers in Place
Ashland’s restructuring actions have provided it with a profitable, high-margin portfolio focused on high-quality markets and better positioned it for future growth. The company is also taking a number of actions including reduction of operating costs to boost profitability. Cost-reduction measures are expected to support its margins in fiscal 2022. The company’s pricing and mix improvement actions are also helping it to counter the current inflation.
The company is also benefiting from strong demand in most consumer end markets. Its industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company, in its fiscal second quarter call, noted that it expects underlying demand to remain strong for its focused ingredients and additives product portfolio. The company is also gaining from the contributions from the Schulke & Mayr acquisition.
Ashland also remains committed to boosting its cash flows and returning value to shareholders. The company remains focused on expanding margins and improving free cash flow conversion. It recently raised its quarterly cash dividend by 12% to 33.5 cents per share. The company’s board also authorized a new, evergreen $500-million common stock repurchase program. The new authorization discontinues and replaces Ashland’s 2018 $1-billion share buyback program.
Ashland Global Holdings Inc. Price and Consensus
Ashland Global Holdings Inc. price-consensus-chart | Ashland Global Holdings Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. NTR, Allegheny Technologies Inc. ATI and Cabot Corporation CBT.
Nutrien, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 163.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 27.5% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 37% in a year.
Allegheny has a projected earnings growth rate of 953.9% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 31.7% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 14% in a year and currently sports a Zacks Rank #1.
Cabot, currently carrying a Zacks Rank #2, has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.
Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 22% over a year.
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