Kronos Worldwide, Inc. KRO stands to benefit from a surge in demand for titanium dioxide (TiO2) and the alleviation of pricing pressures. Moreover, the implementation of cost-reduction strategies is projected to bolster margins.
An opportune moment is emerging for investors to consider adding KRO to their portfolio, given its promising outlook and potential for sustained growth.
Let’s delve into the factors that render this Zacks Rank #2 (Buy) stock an attractive choice for discerning investors at present.
The Resilient Performance of Kronos Worldwide’s Stock
Over the past year, KRO has exhibited remarkable resilience, outperforming its industry peers. With a 32.8% surge in its share price, the company has surpassed the 9.6% downturn witnessed in the industry.
Image Source: Zacks Investment Research
Promising Earnings Growth Outlook for KRO
The Zacks Consensus Estimate for Kronos Worldwide’s 2024 earnings stands at 88 cents, reflecting a prospective year-over-year growth of 304.7%. Furthermore, a robust earnings expansion of 288.9% is anticipated for the third quarter of 2024.
Upward Trajectory of KRO’s Earnings Projections
Over the last 60 days, earnings estimates for KRO have been on an upward trajectory. The Zacks Consensus Estimate for 2024 has escalated by 3.5%, while the forecast for the third quarter has witnessed a 9.7% surge during the same period. Such favorable revision trends instill a sense of confidence among investors regarding the stock.
Riding the Wave of Elevated TiO2 Demand and Strategic Cost Initiatives
Kronos is strategically positioned to capitalize on the heightened demand for TiO2 across major markets. The company notes that TiO2 consumption has exhibited a steady compound annual growth rate of approximately 2% since 2000. Notably, Western Europe and North America collectively contribute around 29% to the global TiO2 consumption figures, with notable growth prospects emerging in South America, Eastern Europe, the Asia Pacific region, and China.
Anticipating a surge in sales volumes for 2024, Kronos is aligning production and inventories with the expected demand levels. By bolstering production rates in accordance with present and foreseeable near-term demand patterns, the company anticipates an increase in its production rates for the remainder of 2024 compared to the levels seen in 2023.
Furthermore, Kronos Worldwide is actively engaged in cost optimization endeavors aimed at aligning with anticipated demand levels. These incisive cost-control measures, coupled with reduced energy expenditures and strategic pricing adjustments, are poised to catalyze margin growth on a year-over-year basis in 2024. The company remains resolute in sustaining TiO2 selling price hikes to achieve historical margin levels, forecasting improved operating results for the full fiscal year 2024.
Kronos Worldwide Inc Price and Consensus
Kronos Worldwide Inc price-consensus-chart | Kronos Worldwide Inc Quote
Exciting Investment Opportunities to Explore
Other stand-out performers in the Basic Materials sector include Hawkins, Inc. HWKN, IAMGOLD Corporation IAG, and Eldorado Gold Corporation EGO, all boasting a Zacks Rank #1 (Strong Buy).
Hawkins’ current fiscal-year earnings are estimated to reach $4.14, signaling a 15.3% ascent from the previous year. Moreover, the stock has witnessed a 12.8% surge in the consensus estimate for its current fiscal-year earnings over the past 60 days, accompanied by a remarkable 103% rally in its share price over the last year.
IAMGOLD has experienced a 46.4% growth in the consensus estimate for its current-year earnings over the last 60 days, having surpassed the estimated earnings in each of the past four quarters with an average surprise rate of 200%. Its stock has surged by 111% over the past year.
Eldorado Gold’s current-year earnings are projected to hit $1.35 per share, signifying a substantial year-over-year gain of 136.8%. The company has outperformed the consensus estimate in each of the last four quarters, boasting an average earnings surprise of 430.3%. Additionally, its shares have soared by approximately 69% over the past year.
