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Innospec (IOSP) Shares Up 37% YTD: What's Behind the Rally?

Zacks Equity Research

Shares of Innospec Inc. IOSP have shot up roughly 37% so far this year. The company has also significantly outperformed its industry’s decline of roughly 19% over the same time frame.

Innospec, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $2.1 billion and average volume of shares traded in the last three months was around 95.5K.


Let’s take a look into the factors that are driving this chemical maker.

What’s Going in IOSP’s Favor?

Solid first-quarter results and upbeat prospects have contributed to the run-up in the company’s shares. Innospec’s adjusted earnings of $1.25 per share for the first quarter rose from $1.02 per share a year ago. It also trounced the Zacks Consensus Estimate of $1.15.

The company’s revenues also went up roughly 8% year over year to $388.3 million in the quarter. Innospec saw strong growth in its Fuel Specialties and Oilfield Services segments in the quarter.

Buoyed by the strong first-quarter performance, Innospec also declared its semi-annual dividend of 50 cents per share for the first half of 2019, representing an increase of 14%.

Innospec has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this timeframe, the company has delivered a positive average earnings surprise of roughly 9.1%.

Moreover, estimates for 2019 for Innospec have moved up over the past three months. Over this period, the Zacks Consensus Estimate for the year has increased by around 3%. The Zacks Consensus Estimate for earnings for 2019 is currently pegged at $5.15 per share, reflecting an expected year-over-year growth of 6.6%.

Innospec, in its first-quarter call, said that it will remain focused on organic growth to develop innovative technologies along with potential acquisition opportunities. The company continues to invest in organic growth projects. Innospec also sees attractive business prospects for the balance of 2019 and beyond.

Innospec is gaining from its balanced portfolio and strategic focus on major end markets. The company remains focused on growing sales and improving margins and is also looking to improve the effectiveness of its operations. It also has significant organic growth projects in its pipeline.

Innospec is also engaged in acquisition opportunities leveraging its strong balance sheet and cash flows, which the company believes will strengthen its business.

Innospec Inc. Price and Consensus


Innospec Inc. Price and Consensus
Innospec Inc. Price and Consensus

Innospec Inc. price-consensus-chart | Innospec Inc. Quote

Stocks Worth a Look

Stocks worth considering in the basic materials space include Materion Corporation MTRN, Flexible Solutions International Inc FSI and AngloGold Ashanti Limited AU.

Materion has an expected earnings growth rate of 27.3% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 12% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current year and carries a Zacks Rank #1. The company’s shares have surged 127% in a year’s time.

AngloGold Ashanti has an expected earnings growth rate of 90.6% for the current year and carries a Zacks Rank #1. Its shares have rallied around 67% in the past year.

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Innospec Inc. (IOSP) : Free Stock Analysis Report
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