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Univar (UNVR) Gains on Cost Reductions and Acquisitions

Univar Solutions Inc. UNVR is benefiting from expense management actions, market expansion and synergies of the Nexeo Solutions acquisition.

The company’s shares are down 3.4% over a year, compared with the 12.7% decline of its industry.

 

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Zacks Investment Research


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Univar is gaining from market share gains, operational execution, cost minimization and a strong liquidity position. It is well placed to gain from consistent market expansion and acquisitions. Univar is also benefiting from its pricing discipline to counter inflation and higher industrial demand, which are contributing to its top line growth.

The acquisition of Nexeo Solutions has also enhanced Univar’s capabilities and accelerated its ability to create a significant value for customers, supplier partners, employees and shareholders. The company is benefiting from the synergies of the Nexeo acquisition.

The buyout of Brazilian ingredients and specialty chemicals distributor Sweetmix will also drive growth for the company’s Food Ingredients portfolio in Brazil and generate growth and cost synergies. This will also springboard its Latin American expansion. Revenues from the company’s LATAM unit climbed 30% year over year in the second quarter, partly driven by the Sweetmix acquisition.

Univar is also focused on cost-cutting, expense management and productivity actions, which are helping the company minimize operational costs and boost margins. It is taking a number of actions to reduce costs in the wake of the coronavirus pandemic, including reduction in travel and other discretionary spending.

The company also has a solid liquidity position. At the end of second-quarter 2022, its liquidity was $1,012 million, including cash and cash equivalents of $234.8 million. UNVR also expects the majority of its debt obligations to mature in 2026 and beyond. The company reduced leverage ratio to 2.2x at the end of second-quarter 2022 from 2.4x at the end of first-quarter 2022.

 

Univar Solutions Inc. Price and Consensus

 

Univar Solutions Inc. Price and Consensus
Univar Solutions Inc. Price and Consensus

Univar Solutions Inc. price-consensus-chart | Univar Solutions Inc. Quote

 

Zacks Rank & Other Stocks to Consider

Univar currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Livent Corporation LTHM, Albemarle Corporation ALB and Sociedad Quimica y Minera de Chile S.A. SQM.

Livent, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 667% for the current year. The Zacks Consensus Estimate for LTHM’s current-year earnings has been revised 9.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Livent’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 15.7%. LTHM has gained around 39% in a year.

Albemarle, sporting a Zacks Rank #1, has a projected earnings growth rate of 425.3% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 63.7% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 27% in a year.

Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.

Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 78% in a year. The company carries a Zacks Rank #2.


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