Kronos Worldwide (KRO) shares soared 9.7% in the last trading session to close at $6.46. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 16.3% loss over the past four weeks.
KRO’s rally appears to reflect optimism over favorable long-term demand fundamentals for titanium dioxide across key end markets. It is benefiting from higher volumes in North American, Latin American and export markets. Cost-reduction and pricing initiatives are also expected to support margins.
This maker of titanium dioxide pigments is expected to post quarterly loss of $0.04 per share in its upcoming report, which represents a year-over-year change of +50%. Revenues are expected to be $520.34 million, up 5.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Kronos Worldwide, the consensus EPS estimate for the quarter has been revised 6% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on KRO going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Kronos Worldwide is a member of the Zacks Chemical – Diversified industry. One other stock in the same industry, Stepan Co. (SCL), finished the last trading session 0.4% higher at $56.8. SCL has returned 3.8% over the past month.
For Stepan Co., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.61. This represents a change of +17.3% from what the company reported a year ago. Stepan Co. currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
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