Element Solutions (ESI) Gains 12% in 6 Months: What's Driving It?
Element Solutions Inc.’s ESI shares have appreciated 11.5% in the past six months. The company also outperformed the industry’s decline of 22.3%.
Image Source: Zacks Investment Research
Let’s take a look at the factors driving the stock’s price appreciation.
What’s Driving Element Solutions?
Element Solutions is on track to achieve record adjusted EBITDA in 2024, with strong execution and strategic positioning in electronics, reinforcing its robust strong long-term growth outlook. The company has revised its 2024 adjusted EBITDA forecast upward from $515-$530 million to a new range of $530-$545 million. Additionally, it projects adjusted earnings per share (EPS) for 2024 between $1.40 and $1.46, alongside an expected free cash flow of $280-$300 million.
In the second quarter of 2024, Element Solutions posted an adjusted EPS of 36 cents, surpassing the Zacks Consensus Estimate of 35 cents. The company reported net sales of $612.7 million, reflecting a 5% year-over-year increase and exceeding the Zacks Consensus Estimate of $611.6 million. Organic net sales grew by 4%, while adjusted EBITDA rose by 16% year over year to reach $135 million.
The company benefited from a recovery in the electronics markets during the second quarter. High-value end markets contributed to a favorable product mix, while ongoing pricing initiatives amid lower raw material costs boosted margins. Sales in the Electronics segment grew 10% year over year to $391.7 million, with organic net sales rising 7% from last year’s figures.
Element Solutions beat estimates in three of the last four quartersand delivered a trailing four-quarter average earnings surprise of 3.8%. The Zacks Consensus Estimate for its 2024 EPS stands at $1.42, reflecting a 10% year-over-year increase.
Element Solutions Inc. Price and Consensus
Element Solutions Inc. price-consensus-chart | Element Solutions Inc. Quote
Zacks Rank & Key Picks
ESI currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Basic Materials space are Newmont Corporation NEM, Franco-Nevada Corporation FNV and Barrick Gold Corporation GOLD. Newmont sports a Zacks Rank #1, while Franco-Nevada and Barrick Gold carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75% from the year-ago levels. The consensus for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 33.8% in the past year.
The Zacks Consensus Estimate for FNV’s current-year earnings is pegged at $3.24. The consensus for FNV’s earnings has increased by 2% in the past 60 days. FNV beat the consensus estimate in three of the last four quarters, with the average earnings surprise being 6%.
The Zacks Consensus Estimate for GOLD’s current year earnings is pegged at $1.21, indicating a year-over-year rise of 44%. GOLD’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average earnings surprise being 21.2%. The company’s shares have increased 28.6% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Element Solutions Inc. (ESI) : Free Stock Analysis Report
Newmont Corporation (NEM) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report