Chemours Can Leverage Its Leadership Position Against A Favorable Backdrop, BofA Says

Chemours Co CC is attractively positioned with titanium dioxide pigments (TiO2) prices inflecting and governments aiming to phase out legacy refrigerant technology, according to BofA Securities.

The Chemours Analyst: Matthew DeYoe initiated coverage of Chemours with a Buy rating and a price target of $42.

The Chemours Thesis: TiO2 prices are rising with volumes being stretched to meet demand in the housing and industrial markets, DeYoe said in the initiation note.

The analyst expects this momentum to continue through at least the third quarter.

“We think Chemours could capitalize on this inflation through spot transactions, while also tying volumes into its long term, value stabilization platform. This will likely translate into a more dependable cash stream that could be deployed into additional growth opportunities, in our view,” he added.

Inflecting TiO2 prices and the phasing out of legacy refrigerant technology should position the company for growth in cash flows and earnings, driving value “in excess of what the underlying commodity cycles would dictate,” DeYoe wrote.

“With Chemours we see this opportunity trading at a discount to commodity peers facing peak earnings pressures,” he added.

CC Price Action: Shares of Chemours had risen by 0.78% to $33.49 at the time of publication Thursday afternoon.

(Photo: Chemours)