Chemours Quarterly Earnings Outperform; Shares Gain 3.3%

Chemours Co. reported better-than-expected 4Q results driven by lower cost and currency tailwinds. Shares rose 3.3% in Friday’s pre-market trading session after closing almost 2.5% higher on Feb. 11.

Chemours’ (CC) 4Q earnings increased 8.9% to $0.61 per share on a year-over-year basis beating the Street consensus of $0.41 per share. Revenue decreased marginally to $1.33 billion but surpassed the consensus mark of $1.28 billion.

Chemours is focused on thermal & chemical products and solutions. The company’s flagship products include well-known brands such as Ti-Pure, Opteon, Freon, Teflon, Viton, Nafion, and Krytox.

The company’s adjusted EBITDA came in at $246 million, up 8% year over year. Adjusted EBITDA margin was 18% in the quarter, up 100 basis points.

For 2021, the company projects adjusted EPS to be in a range of $2.40 to $3.12. Adjusted EBITDA is anticipated to be in the range of $1 billion to $1.15 billion. (See Chemours stock analysis on TipRanks)

Concurrent with the 4Q results, the company also announced the division of its fluoroproducts segment into two new reportable segments, namely, Thermal & Specialized Solutions (TSS) and Advanced Performance Materials (APM).

Following the results, Alembic Global analyst Hassan Ahmed reiterated a Buy rating and a price target of $31 (12.8% upside potential) on the stock. The analyst expects, “CC shares to trade up on the company’s Q4’20 earnings beat and ahead-of-consensus 2021 guidance.”

“Chemours is teed up to benefit from a cyclical uplift within Titanium Technologies and a regulations-driven demand boost within Fluoroproducts,” Ahmed added.

The analyst believes that, “global TiO2 utilization rates will tighten in 2021 and beyond, which, when coupled with Chemours’ low-cost and market-leading position, will result in significant earnings upside over the near to medium term.”

Wall Street analysts are cautiously optimistic about the stock. The Moderate Buy consensus rating breaks down into 2 Buy ratings versus 3 Hold ratings. The average analyst price target stands at $30.60 and implies upside potential of about 11.3% to current levels over the next 12 months. That’s after shares jumped 36.7% in the past six months.