Yahoo Finance Why You Should Add Kronos Worldwide (KRO) to Your Portfolio Now
Kronos Worldwide, Inc.’s KRO shares have rallied around 25% over the past six months. It is expected to gain from higher demand for titanium dioxide (TiO2) and easing pricing pressure this year. Cost-reduction initiatives are also expected to support margins.
We are positive about the company’s prospects and believe that the time is right for you to add the stock to your portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.
An Outperformer
KRO has outperformed the industry it belongs to over the past year. The company’s shares have rallied 49.1% compared with a 6.9% decline of the industry.
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Solid Growth Prospects
The Zacks Consensus Estimate for earnings for 2024 for Kronos Worldwide is currently pegged at 85 cents, reflecting an expected year-over-year growth of 297.7%. Moreover, earnings are expected to register a 414.3% growth in second-quarter 2024.
Earnings Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for KRO for 2024 has increased by around 157.6%. The consensus estimate for the second quarter has also been revised 175% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Healthy TiO2 Demand, Cost Initiatives Drive KRO
Kronos is well-placed to benefit from higher demand for TiO2. Per the company, TiO2 consumption has increased at a compound annual growth rate of around 2% since 2000. Western Europe and North America account for roughly 14% and 15% of global TiO2 consumption, respectively. These regions are expected to continue to be the biggest consumers of TiO2. Moreover, markets for TiO2 are growing in South America, Eastern Europe, the Asia Pacific region and China.
The company expects sales volumes in 2024 to exceed 2023 levels factoring in the recently experienced improved demand and expectations that demand will continue to improve this year.
Kronos Worldwide is also taking actions to reduce costs and align production and inventories to expected demand levels, which are expected to support its margins. It has increased its production rates in sync with current and expected near-term demand improvement. It expects its production rates for the balance of 2024 to be higher than the level witnessed in 2023.
Moreover, the company’s internal cost initiatives are expected to continue to support margins in 2024. KRO envisions reduced energy costs along with its cost-cutting initiatives and the realization of selling price increases to result in improved margins on a year-over-year basis this year. It expects to report higher operating results on a year-over-year basis for full-year 2024 based on the expected improved demand, higher selling prices and reduced production costs.
Kronos Worldwide Inc Price and Consensus
Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote
Other Stocks to Consider
Other top-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Axalta Coating Systems Ltd. AXTA and ATI Inc. ATI.
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared roughly 96% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta Coating Systems, carrying a Zacks Rank #1, has a projected earnings growth rate of 26.8% for the current year. In the past 60 days, the consensus estimate for AXTA's current-year earnings has been revised upward by 5.9%. The company’s shares have gained roughly 5% in the past year.
ATI currently carries a Zacks Rank #2. ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have rallied around 35% in the past year.
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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
