Image Source: Zacks Investment Research
Let’s take a look at the factors that are driving NGVT stock.
Portfolio Transformation & Higher Margins Support GrowthIngevity continues to benefit from its efforts to streamline and optimize its portfolio, with a focus on higher-margin businesses and enhancing the quality of its earnings. The company has made considerable progress in this strategy through the divestiture of its Industrial Specialties business, Ozark Materials Road Markings product line and crude tall oil refinery, while the Advanced Polymer Technologies business remains under the divestiture process. The sale of the Ozark Road Markings business for approximately $65 million strengthened the company’s portfolio.
Ingevity’s earnings are also supported by strategic acquisitions, including Georgia-Pacific’s pine chemicals business. Cost-reduction initiatives, pricing actions and favorable product mix have further aided profitability. These measures have helped the company mitigate inflationary pressures and maintain an impressive financial performance amid an uncertain macroeconomic backdrop.
In the second quarter, adjusted EBITDA climbed 14% year over year to $115 million, while adjusted EBITDA margin expanded to 36.6%. Management also raised its 2026 adjusted EBITDA guidance to $380-$400 million, reflecting confidence in the company’s earnings.
The company is also gaining from the increasing penetration of hybrid vehicles. As consumer preferences have shifted toward hybrids, particularly following the expiration of EV tax credits, demand for advanced and higher-value activated carbon solutions has improved. This trend, together with pricing actions and a favorable product mix, has supported sales and profitability in Performance Materials. Management expects the growing adoption of hybrids to develop into a broader global trend, offering lucrative growth potential in the future.
Overall, continued portfolio simplification, improving margins, pricing benefits and rising demand for higher-value applications should support Ingevity’s earnings growth and enhance long-term shareholder value.
NGVT’s Zacks Rank & Other Key PicksNGVT currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Neo Performance Materials Inc. (NOPMF - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Avient Corporation (AVNT - Free Report) .
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 pegged at $1.4 per share, indicating a 185.71% year-over-year increase. NOPMF’sshares have gained 84.1% 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’s shares have gained 17.4% over the past year.