The Chemours Company (NYSE: CC)  is one of two publicly traded companies able to cash in on on a major worldwide regulatory change regarding chemicals used as refrigerants. Chemours’ Opteon is one of two acceptable substitutes for current refrigerants.

Target: $48

Buy Up To: $30

The Kigali agreement, signed in November 2016, lays out a schedule for developing nations to reduce the use of traditional hydroflourocarbons (HFCs) as coolants and refrigerants.

Rapid adoption of low global warming potential (GWP) refrigerants has already begun. Late last month Honeywell, who makes a similar low GWP coolant, noted its backlog of orders for the product remains above $3 billion dollars.

Chemours, which has already begun selling Opteon, needs only a sliver of that market to multiply revenue and profits. For reference, Chemours’ current Opteon revenue should equal roughly $700 million in the next year.

My $48 target uses a conservative PE (price to earnings) ratio of 20 on Chemours’ 2018 estimate of $2.42.

Chemours does carry litigation risk as it assumed liability for several lawsuits when it was spun out of DuPont in July 2015. Although the company has reserved significant funds against these possible rulings, there is always a chance a charge could be larger than the amount set aside.

Earnings Call:

Chemours reports earnings after the close on Wednesday, February 15, 2017. The company will conduct its fourth quarter 2016 webcast conference call on Thursday, February 16, 2017 at 8:30 a.m. Eastern Standard Time.

The call is open to the public and can be accessed via live webcast and teleconference.

Conference Call: Please visit investors.chemours.com for a link to the live webcast and to view the accompanying slides.

Although Chemours management does not typically provide a firm backlog number (the value of orders received for delivery in the next 12 months), I will be looking for color on demand levels for Opteon in the U.S. and in Europe where several mandates push for lower HFC use as soon as 2018.