Wells Fargo analyst Michael Sison has maintained their neutral stance on NGVT stock, giving a Hold rating on November 1.
Michael Sison has given his Hold rating due to a combination of factors affecting the expected performance of Ingevity’s stock (NGVT).
Sison anticipates that the company’s “repositioning” efforts within its Performance Chemicals sector will result in a greater than expected impact on earnings. This, coupled with the stock currently trading at a 7-8 year low, is projected to dampen the potential for multiple expansion. Despite the challenges, Sison maintains a price target of $45.
Furthermore, Sison has adjusted downwards his earnings per share (EPS) and EBITDA estimates for the years 2023 and 2024, factoring in the ongoing CTO cost headwinds and weak industrial markets. The company’s sales in Industrial Specialties (within Performance Chemicals) have reportedly fallen due to higher CTO costs, and its repositioning efforts are projected to further reduce these sales. Sison also notes the $280MM costs associated with the Performance Chemicals repositioning, which includes closing facilities and reducing exposure to CTO. Despite these headwinds, Sison believes the risk/reward balance is maintained, based on EV/EBITDA multiples from bear to bull cases of around 8-9x.
In another report released on November 1, BMO Capital also assigned a Hold rating to the stock with a $54.00 price target.
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Ingevity (NGVT) Company Description:
Ingevity Corp engages in the manufacture of specialty chemicals and carbon materials. It operates through the following segments: Performance Chemicals and Performance Materials. The Performance Materials segment consists of automotive technologies and process purifications product families. Automotive technologies produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. Process purifications produce a number of activated carbon products for food, water, beverage and chemical purification applications. The Performance Chemicals segment primarily addresses applications in three product families: pavement technologies, oilfield technologies, and industrial specialties. The company was founded on March 27, 2015 and is headquartered in North Charleston, SC.
Read More on NGVT:
- Ingevity announces further repositioning of Performance Chemicals business
- Ingevity reduces FY23 adjusted EBITDA guidance to $375M-$390M
- Ingevity reports Q3 adjusted EPS $1.21, consensus $1.21
- HP Inc. upgraded, Airbnb downgraded: Wall Street’s top analyst calls
- Loop Capital downgrades Ingevity on challenging developments
