What happened
While the overall dour sentiment pervading the market is driving the S&P 500 toward a decline of more than 5% this week, investors are especially pessimistic about Chemours (CC +2.81%). As of 2:05 p.m. ET, shares of Chemours are down 20.7% since the market's close last Friday, according to data from S&P Global Market Intelligence.
Besides the overarching concerns about the economy, investors have overwhelmingly clicked the sell button with regard to shares of Chemours after the company lowered its 2022 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast on Wednesday. Some bearish attention from Wall Street, meanwhile, was an additional catalyst for the titanium stock's decline.
NYSE: CC
Key Data Points
So what
In a press release addressing its 2022 guidance, Chemours stated that it foresees a less profitable year than it had originally expected. In its second-quarter 2022 earnings presentation, management had projected 2022 adjusted EBITDA of $1.475 billion to $1.575 billion. Now, however, the company expects to generate adjusted EBITDA of $1.4 billion to $1.45 billion, a 7% decline at the midpoints of the ranges. While the bottom line may not be as robust as management had originally believed it would be, the midpoint of the new guidance is a 9% increase over that which the company reported in 2021.
Responding to the company's business update, several analysts revised their price targets on Chemours' stock.
- Arun Viswanathan, an analyst at RBC Capital, lowered the price target to $35 from $48.
- Matthew DeYoe at Bank of America reduced the price target to $36 from $44.
- BMO cut its price target to $46 from $55.
Now what
It's unsurprising that analysts turned bearish on shares of Chemours with management projecting a less profitable 2022. The timeline upon which analysts are basing their price targets, however, is unclear. Oftentimes, Wall Street has shorter investing horizons than the minimum three- to five-year holding periods favored by long-term investors. Consequently, investors interested in a leading titanium stock like Chemours can pick it up at at discount with shares now valued at only 4.7 times forward earnings.
