Ingevity (NGVT): Reassessing Valuation After Strategic Asset Sale to Mainstream Pine Products
Ingevity (NGVT) just took a decisive step in its overhaul plans by signing an Asset Purchase Agreement to sell its industrial specialties product line and the North Charleston crude tall oil refinery to Mainstream Pine Products.
See our latest analysis for Ingevity.
The stock has been rebuilding confidence, with a strong year to date share price return of 32.88 percent and a 1 year total shareholder return of 10.54 percent, even as the 3 year total shareholder return of negative 29.05 percent underlines how much sentiment has had to recover.
If this strategic reshaping has you rethinking where growth could come from next, it might be worth scanning fast growing stocks with high insider ownership for other under the radar opportunities with momentum building behind them.
With the shares still trading at a sizeable intrinsic discount and well below the average analyst price target, the question now is whether Ingevity remains mispriced value or if the market is already factoring in its next phase of growth.
Most Popular Narrative: 19.5% Undervalued
With the narrative fair value sitting well above the last close of $52.54, Ingevity is being framed as a recovery story with meaningful upside potential.
Substantial investments in innovation and engineered additives, especially in applications such as EV battery materials (via the Nexeon partnership) and process purification, position Ingevity to capture new demand arising from the increased global focus on sustainability and decarbonization, providing future top line growth opportunities as industries transition to green technologies.
Curious how modest revenue growth, a sharp swing from losses to strong profits, and a low future earnings multiple can still justify a higher fair value? The full narrative explains the math behind that gap in detail.
Result: Fair Value of $65.25 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent weakness in Advanced Polymer Technologies and tariff related uncertainty could cap margin recovery and undermine the bullish recovery narrative.
Find out about the key risks to this Ingevity narrative.
Another Lens on Value
While the narrative points to upside, the SWS DCF model is even more optimistic, suggesting fair value around $85.29 versus the current $52.54. That is a steep gap for a highly leveraged, still unprofitable business, leaving investors to ask which story will win out.
Look into how the SWS DCF model arrives at its fair value.
Build Your Own Ingevity Narrative
If you see the story differently or want to run your own numbers, you can build a personalized view in under three minutes: Do it your way.
A great starting point for your Ingevity research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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