Zacks Investment Research downgraded Compass Minerals International Inc. (NYSE:CMP) to a Zacks Rank #5 (Strong Sell) on Sep 8, 2016. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market over the next few quarters.
Why the Downgrade?
Market sentiments have been weak for Compass Minerals International since the beginning of 2016, as evident from an annual return of a negative 1.5%. Also, the company’s financial performance in the second quarter was mixed. Earnings of 18 cents per share, though exceeded the Zacks Consensus Estimate by a cent, were down from the year-ago tally of 39 cents. Revenues decreased 8% year over year.
For 2016, Compass Minerals International reduced its earnings forecast to $2.60−$2.90 per share from $3.25−$3.65 predicted earlier. The decrease has been triggered by expectations of difficult operating conditions for the highway deicing and sulfate of potash markets. Volumes in the Salt and Plant Nutrition segments are forecasted to fall.
Bleak prospects have made investors doubtful regarding Compass Minerals International’s performance in the quarters ahead. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 13.1% to $2.85 per share for 2016 and by 12.7% to $3.77 for 2017.
Stocks to Consider
Compass Minerals International currently has a market capitalization of $2.5 billion. Better-ranked stocks in the chemical industry include Innophos Holdings Inc. (NASDAQ:IPHS) , Innospec Inc. (NASDAQ:IOSP) and Mitsubishi Chemical Holdings Corporation MTLHY. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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COMPASS MINERLS (CMP): Free Stock Analysis Report
INNOPHOS HLDGS (IPHS): Free Stock Analysis Report
INNOSPEC INC (IOSP): Free Stock Analysis Report
MITSUBISHI CHEM (MTLHY): Free Stock Analysis Report
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Zacks Investment Research