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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its stance on Chemours Company (NYSE:CC), a leading chemicals manufacturer, by upgrading the stock rating from ’Neutral’ to ’Outperform’. The firm also set a price target for Chemours shares at $19.00. The upgrade comes as the stock trades near its 52-week low of $13.09, having declined 45.5% over the past year. According to InvestingPro analysis, the company currently offers a substantial 7.07% dividend yield, making it an interesting prospect for income-focused investors.
The revision in rating comes as Mizuho analysts observe several positive developments within Chemours. According to Mizuho, the normalization of Freon-related inventories and the stabilization of specialty plastics are key factors contributing to the improved outlook. Additionally, the expectations for perfluoroalkyl and polyfluoroalkyl substances (PFAS) to remain below regulatory thresholds have also been noted as a positive sign. InvestingPro data reveals the company maintains a PEG ratio of 0.18, suggesting potential undervaluation relative to its growth prospects. For deeper insights into Chemours’ valuation and growth metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Chemours, renowned for its position as the top global producer of fluorine-based refrigerants and specialty plastics, as well as the second-largest global producer of titanium dioxide (TiO2) pigments, has recently seen its new CEO and CFO settle into their roles. The transition to NextGen refrigerants, where Chemours and Honeywell (NASDAQ:HON)’s spin-off are the sole producers, is balancing out the prior stockpiling within the industry.
The company has been navigating through a challenging period marked by China’s expansion in TiO2 production, followed by a collapse in China’s property market and a general global softness. However, Mizuho analysts believe that the low operating rates in this sector have now bottomed out.
Looking ahead, no new near-term PFAS restrictions are anticipated, especially with the new Environmental Protection Agency (EPA) chemicals lead being a former DuPont (NYSE:DD) employee. Mizuho also suggests that a potential settlement ahead of the anticipated New Jersey PFAS trial in spring or summer should leave Chemours with sufficient leeway under its sharing agreement with its former parent companies. However, investors should note that InvestingPro analysis highlights the company’s significant debt burden, with a debt-to-equity ratio of 7.21, though it maintains a healthy current ratio of 1.68. These metrics are among the dozens of financial indicators available to InvestingPro subscribers, helping them make more informed investment decisions.
In other recent news, Chemours Company reported its fourth-quarter 2024 earnings, showing a slight miss on earnings per share (EPS) but exceeding revenue expectations. The EPS was $0.11, just below the $0.12 forecast, while revenue reached $1.4 billion, surpassing the anticipated $1.37 billion. Chemours also announced a modest year-over-year increase of 2% in adjusted EBITDA for the December quarter, totaling $179 million. In a related development, Mizuho Securities revised its price target for Chemours, reducing it from $21.00 to $19.00, maintaining a Neutral rating. This adjustment was influenced by Chemours’ guidance for fiscal year 2025 adjusted EBITDA, which was set at a midpoint of $900 million, below consensus estimates. Furthermore, Jefferies also adjusted its price target for Chemours to $20, citing a Hold rating. Additionally, Chemours disclosed that board member Guillaume Pepy will not seek re-election at the 2025 Annual Meeting of Shareholders, a decision not linked to any disagreements with the company. These developments reflect a mix of financial results, analyst assessments, and changes in company leadership.
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