Ingevity (NGVT) Early Estimates of Q1 Earnings and Revenue

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Ingevity (NGVT) exited with quarterly earnings of $1.62 per share, beating Zacks consensus estimate of $1.11 per share. That compares to earnings of $1.27 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 45.95%. A quarter ago, this company was expected to post a profit of $0.71 per share when it actually produced a profit of $0.78, delivering a surprise of 9.86%.

In the past four quarters, the company has exceeded consensus EPS estimates four times.

Ingenuity, which is industry-owned Zacks Chemical – Specialty, reported revenue of $382.8 million for the three months ended March 2022, beating Zacks’ consensus estimate of 11.30%. That compares to revenues of $320.3 million a year ago. The company has exceeded consensus revenue estimates four times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Ingevity shares have lost around 15.7% since the start of the year compared to a decline of -12.4% for the S&P 500.

What is the next step for Ingevity?

Although Ingevity has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Before this publication of the results, the trend of estimate revisions for Ingevity is mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.65 on $402.8 million in revenue for the upcoming quarter and $5.72 on $1.54 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Chemicals – Specialty is currently in the top 38% of over 250 Zacks industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Valvoline (VVV), has yet to report results for the quarter ending March 2022. Results are expected to be released on May 9.

This maker of automotive and industrial lubricants is expected to post quarterly earnings of $0.48 per share in its next report, representing a year-over-year change of +4.4%. The consensus EPS estimate for the quarter has been revised down 0.2% in the past 30 days from the current level.

Valvoline’s revenue is expected to be $876.08 million, up 25% from the year-ago quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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