Market Overview

Ingevity Delivers On Expectations And Executes Solidly, Buckingham Says In Upgrade

Share:
Related
Here's Why Loop Capital 'Begrudgingly' Downgraded Ingevity
Benzinga's Top Upgrades, Downgrades For February 27, 2018

Specialty chemicals manufacturer Ingevity Corp (NYSE: NGVT) announced at its Investor Day last month five-year targets that point to more rapid than expected earnings growth, an analyst at Buckingham Research said.

The Analyst

Buckingham's Mark Weintraub upgraded Ingevity from Neutral to Buy and increased his price target from $64 to $92, suggesting roughly 20 percent upside.

The Thesis

Ingevity has been consistently delivering on expectations, having delivered seven consecutive earnings beat since it went public, Weintraub said in a note.

The company's execution is solid, and if the new guidance is achieved, there could be substantial upside to the stock, Weintraub said.

Among the key drivers that are becoming clearer are the prospects for the Performance Materials segment, which is being propelled by the North American business, with China also set to join the party soon, the analyst said. He sees the revenues and margins of the Performance Chemicals segment jumpstarting, thanks to the impending acquisition of Georgia-Pacific's chemicals business.

As such, Buckingham increased its 2018 earnings per share estimate for Ingevity from $3.10 to $3.30, incorporating lower tax rates in its model. The firm initiated its 2019 earnings per share estimate of $4.15.

"We see bull case/bear case valuation of $120/$64," the firm said.

The Price Action

Ingevity shares are up about 37 percent over the past year.

At time of writing, the stock was up 2.3 percent to $79.36.

Related Links:

Jim Cramer Gives His Opinion On Lockheed Martin, DowDuPont And More

Goldman Sachs 'Disappointed' By Darling Ingredients' EBITDA Outlook, Moves To Neutral

Latest Ratings for NGVT

DateFirmActionFromTo
Jul 2018KeyBancMaintainsOverweightOverweight
Jul 2018BuckinghamMaintainsBuyBuy
Jul 2018KeyBancMaintainsOverweightOverweight

View More Analyst Ratings for NGVT
View the Latest Analyst Ratings

Posted-In: Buckingham Research Mark WeintraubAnalyst Color Upgrades Price Target Analyst Ratings

 

Related Articles (NGVT)

View Comments and Join the Discussion!

Costco 'Has The Tools To Compete And Win': Analysts React To Retailer's Q2 Report

Control4 Has A 'Firm Hand On The Wheel,' Imperial Capital Says In Upgrade