Ingevity Corporation NGVT is benefiting from investments in high-return opportunities and development of new growth avenues.
We are positive about NGVT'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.
Let's see what makes NGVT stock an attractive investment option at the moment.
Earnings estimates for NGVT have been going up over the past 30 days. The Zacks Consensus Estimate for fiscal 2026 has increased by 6.9%. The consensus estimate for fiscal 2027 has also been revised 1.7% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
The Zacks Consensus Estimate for NGVT's 2026 earnings is pegged at $5.40, suggesting a 30.75% increase from the previous year's tally. Earnings are projected to increase by 9.26% in 2027.
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ROE is a measure of a company's efficiency in utilizing shareholders' funds. ROE for the trailing 12-months for Ingevity is 284.7%, above the industry's level of 22.1%.
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Ingevity raised its full-year 2026 adjusted earnings guidance to $5-$5.45 per share from the previous projection of $4.7-$5.2. The company also increased its adjusted EBITDA forecast to $380-$400 million from $370-$395 million. The company continues to expect full-year net sales of $1.05-$1.15 billion. Free cash flow is now projected at $220-$245 million, excluding the $113.2 million litigation settlement payment compared with the prior outlook of $215-$245 million.
Ingevity shares have gained 20.3% against the industry's decline of 0.9% in the past year.
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Ingevity's ongoing portfolio transformation is improving the prospects of its business and sharpening its focus on higher-return opportunities. The company has completed the divestitures of Industrial Specialties and Road Markings, while the divestiture process for Advanced Polymer Technologies is now progressing steadily. It has also eliminated $10 million of approximately $20 million in stranded costs associated with the divestitures, providing an additional structural cost benefit.
The company is also developing newer avenues that could support growth over time. Ingevity secured its first municipal water-treatment contract for PFAS filtration, a significant commercial validation. Its differentiated performance and lower-cost, drop-in potential of its carbon technology address PFAS requirements. The company is also expanding the monomer production capacity of caprolactone in Warrington and increasing the polyol capacity at its DeRidder plant.
Meanwhile, the structural shift toward hybrid vehicles is strengthening Ingevity's Performance Materials segment. Hybrids require more advanced carbon solutions and generate a higher-value product mix, supporting the segment's long-term competitive positioning.
Finally, disciplined capital allocation retains Ingevity's lucrativeness. Leverage has reached 2.5X, while the company continues to reduce debt and invest in high-return opportunities. Ingevity repurchased $35 million of shares in the second quarter and remains committed to its $300 million repurchase program through 2027, providing an additional tailwind for the stock.
NGVT currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Neo Performance Materials Inc. NOPMF, Carpenter Technology Corporation CRS and Avient Corporation AVNT.
While NOPMF currently sports a Zacks Rank #1 (Strong Buy), CRS and AVNT carry a Zacks Rank #2 each. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NOPMF's 2026 earnings is pinned at $1.4 per share, indicating a 185.71% year-over-year increase. NOPMF'sshares have gained 93% over the past year.
The Zacks Consensus Estimate for CRS' fiscal 2027 earnings is pegged at $12.92 per share, indicating a rise of 20.07% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.
The Zacks Consensus Estimate for AVNT's current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT'sshares have gained 19.6% over the past year.
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Ingevity Corporation (NGVT) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).