Chemours (CC) Stock Up 32% in a Year: What's Driving It?
Chemours (CC) benefits from strong end-market demand and its cost-reduction and pricing initiatives.
The Chemours Company’s CC shares have shot up 31.7% over the past year. The company has also outperformed its industry’s rise of 6.1% over the same time frame. It has also topped the S&P 500’s 22.9% rise over the same period.
Let’s dive into the factors behind this chemical maker’s stock price appreciation.
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What’s Favoring CC?
Chemours, a Zacks Rank #3 (Hold) stock, is benefiting from a rebound in demand from the coronavirus-induced downturn, strong execution and its cost-reduction and pricing actions. The company is seeing demand revival across its end markets and regions on the global macroeconomic recovery. Strong market demand is contributing to higher volumes and improved pricing.
The company’s Thermal & Specialized Solutions segment is benefiting from strong demand in refrigerants across most regions. It is also witnessing strong adoption of the Opteon platform in all markets amid headwinds from semiconductor supply-chain disruptions that are affecting automotive demand. Chemours remains committed toward driving Opteon adoption.
Chemours is also gaining 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 its margins. It is also taking appropriate pricing measures to counter higher costs partly due to supply chain issues and raw material inflation.
The company also remains focused on boosting its cash flows and returning value to shareholders. It generated strong free cash flow of $244 million in the third quarter of 2021. Chemours expects to generate free cash flow of more than $500 million for full-year 2021 and return the majority of this to its shareholders through dividend and share repurchases.
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include Commercial Metals Company CMC, AdvanSix Inc. ASIX and Albemarle Corporation ALB.
Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 10.5% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 22.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 7.4%, on average. CMC has rallied around 63% in a year.
AdvanSix, carrying a Zacks Rank #1, has an expected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 1.6% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 100% in a year.
Albemarle, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 49.8% for the current year. ALB's consensus estimate for the current year has been revised 4% upward over the past 60 days.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have popped around 34% in a year.
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