Tronox Holdings ( NYSE: TROX ) fell 5% to $13 a share by 11:32 a.m. ET after analysts at BMO Capital downgraded its stock to Market Perform from Outperform. The bank said falling prices for titanium dioxide and higher energy costs will pressure earnings.
BMO also downgraded Venator Materials ( VNTR ) to Underperform from Market Perform because of similar pressures on its business.
BMO reduced its Q3 revenue estimate for Tronox to $957 million from $996 million and EPS forecast to $0.82 from $0.92. The bank also cut its price target to $16 from $21 a share.
“We believe Tronox faces a challenging outlook with titanium dioxide prices, which are expected to come down on reduced demand and improved supply chains. A,” John P. McNulty, analyst at BMO, said in the research note.
Titanium dioxide is used as a white pigment in industrial and consumer products.
Seeking Alpha contributor Valkyrie Trading Society has a Strong Buy rating on Tronox ( TROX ) on rising prices for its products . Columnist The Investment Doctor rates Tronox ( TROX ) as a Buy on its free cash flow yield .
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Tronox falls as BMO Capital downgrades chemical maker to Market Perform