Element Solutions Inc. ESI experienced a 11.3% increase in its stock value in the past six months, driven by robust financial results in the second quarter and raised financial guidance for 2024.
The stock offers an attractive investment opportunity with strong growth prospects, as reflected in its Zacks Rank #1 (Strong Buy).
Element Solutions Inc. Price and Consensus
Element Solutions Inc. price-consensus-chart | Element Solutions Inc. Quote
Positive Earnings Surprise History
ESI outperformed the Zacks Consensus Estimate in three of the last four quarters while matching the same on the remaining occasion. It delivered a trailing four-quarter average earnings surprise of 3.8%.
Healthy Growth Potential
The Zacks Consensus Estimate for 2024 earnings is pegged at $1.42, indicating a 10% increase from the previous year’s level. Earnings are likely to increase 18.1% in 2025.
ESI’s Earnings Estimates Northbound
The Zacks Consensus Estimate for 2024 has increased around 1% in the past two months. The consensus estimate for 2025 has been revised upward by 5.7% in the same period.
Element Solutions Outperforms Industry
ESI’s shares have risen 29.1% in the past year against the industry’s decline of 9.6%.
Image Source: Zacks Investment Research
What’s Driving Element Solutions?
Element Solutions is on course to achieve record-adjusted EBITDA in 2024, driven by strong execution and strategic positioning within the electronics sector, supporting its positive long-term growth outlook. The company has revised its 2024 adjusted EBITDA guidance upward from the previous range of $515-$530 million to a new target of $530-$545 million. Additionally, it now expects adjusted earnings per share (EPS) for 2024 to be between $1.40 and $1.46, with a projected free cash flow of $280-$300 million.
In the second quarter of 2024, Element Solutions reported an adjusted EPS of 36 cents, surpassing the Zacks Consensus Estimate of 35 cents. Net sales came in at $612.7 million, marking a 5% year-over-year increase and exceeding the Zacks Consensus Estimate of $611.6 million. Organic net sales grew 4%, while adjusted EBITDA saw a 16% year-over-year rise to $135 million.
The company benefited from the recovery in the electronics market in the quarter, with high-value end markets contributing to a favorable product mix. Ongoing pricing initiatives, coupled with lower raw material costs, also bolstered margins. Sales in the Electronics segment increased 10% year over year to $391.7 million, with organic net sales growing 7% from the previous year.
Other Stocks to Consider
Some other top-ranked stocks in the Basic Materials space are Newmont Corporation NEM, Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO, each sporting a Zacks Rank #1. 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 per share, indicating a rise of 75% from the year-ago level. The consensus mark for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 33.9% in the past year.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’s earnings beat the consensus estimate in each of the last four quarters, with the average surprise being 15.9%. The stock has rallied nearly 139.1% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 430.3%. The company's shares have risen roughly 93% in the past year.
Zacks Names #1 Semiconductor Stock
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Element Solutions Inc. (ESI) : Free Stock Analysis Report
Newmont Corporation (NEM) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Eldorado Gold Corporation (EGO) : Free Stock Analysis Report
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