Here's What Makes Chemours (CC) Stock A Solid Bet Right Now
Chemours (CC) benefits from demand revival across all markets, strong execution and its cost-reduction actions.
The Chemours Company CC is benefiting from higher demand for Opteon in mobile applications, strong execution and cost-cutting measures. We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Chemours currently carries a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.
Let's see what makes this chemical maker a compelling investment option at the moment.
Shares of Chemours have rallied 36.6% over a year compared with the 20.7% rise of its industry. It has also outperformed the S&P 500’s 31.3% rise over the same period.
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Estimates Moving Up
Over the past two months, the Zacks Consensus Estimate for Chemours for the current year has increased around 11.5%. The consensus estimate for third-quarter 2021 has also been revised 9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
Chemours has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 38.9%, on average.
Solid Growth Prospects
The Zacks Consensus Estimate for earnings for 2021 for Chemours is currently pegged at $3.69, reflecting an expected year-over-year growth of 86.4%. Moreover, earnings are expected to register 106.4% growth in third-quarter 2021.
Valuation looks attractive as Chemours’ shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Chemours is currently trading at trailing 12-month EV/EBITDA multiple of 7.67, cheaper compared with the industry average of 9.89.
Chemours is gaining from a rebound in demand from the pandemic-led lows, strong execution and its cost-reduction actions. The company is seeing demand revival across all markets and regions on the global macroeconomic recovery.
The company is witnessing increasing adoption of the Opteon platform. Demand for Opteon remains strong in mobile and stationary applications. Chemours remains committed toward driving Opteon adoption. It is ramping up production at the new low-cost Opteon Corpus Christi facility.
Chemours should also gain from its efforts to reduce costs. It is undertaking actions to cut costs by reducing overhead, discretionary spend and capital expenditures. The company’s cost-reduction program along with its productivity and operational improvement actions across its businesses are expected to support margins in 2021.
The company also remains focused on boosting its cash flows and returning value to shareholders. It generated strong free cash flow of $189 million in the second quarter. Chemours expects to generate free cash flow of more than $450 million in 2021 and return the majority of this to its shareholders through dividend and share repurchases.
The Chemours Company Price and Consensus
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include The Mosaic Company MOS, United States Steel Corporation X and AdvanSix Inc. ASIX, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Mosaic has an expected earnings growth rate of 471.8% for the current year. The stock has also rallied around 76% over a year.
U.S. Steel has a projected earnings growth rate of 368.9% for the current year. The company’s shares have shot up around 204% in a year.
AdvanSix has a projected earnings growth rate of 160.4% for the current year. The company’s shares have surged around 204% in a year.
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