Univar Inc. UNVR announced that it has been selected as BASF's authorized Midwest United States distributor for Baxxodur polyetheramine curing agents and chain extenders.
Notably, BASF markets a wide array of amine-based curing agents for professional epoxy resin and polyurea processing under the Baxxodur brand.
Univar’s expansive distribution network along with in-depth industry knowledge enables it to represent these specialty products in the coatings, adhesives, sealants and elastomers (CASE) markets.
Moreover, the distribution deal provides a great opportunity to Univar for adding a highly complementary product to its CASE portfolio.
Univar’s shares have lost 32.8% in the past year compared with the 44.1% decline recorded by its industry.
In second-quarter 2019 earnings call, the company revised its adjusted EBITDA forecast considering lower-than-expected demand for chemicals and ingredients, higher-than-expected net cost synergies from Nexeo and outlook from many supplier partners. It now expects adjusted EBITDA between $725 million and $740 million compared with the previous view of $740 million and $760 million.
Univar is progressing well with the integration of Nexeo's chemical distribution customers, suppliers and support functions. The company now sees higher cost-saving synergies from Nexeo than what it had originally anticipated. It has raised guidance for annual net synergy from $100 million to $120 million (before tax). Univar expects to achieve $20 million in net synergies this year, higher than the initial expectations of $10 million.
Zacks Rank & Key Picks
Univar currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are Kinross Gold Corp. KGC, Alamos Gold Inc. AGI and Arconic Inc. ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinross has an expected earnings growth rate of 150% for 2019. The company’s shares have surged 72.3% in the past year.
Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 68.6% in a year’s time.
Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 15.2% in the past year.
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