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Koppers (KOP) Shares Up 11% in 6 Months: What's Driving It?
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Koppers Holdings Inc.’s (KOP - Free Report) shares have rallied 11.1% in the last six months. Owing to the upside, the stock outperformed its industry’s fall of 8.6% over the same time frame. The company has topped the S&P 500’s roughly 5.4% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in Koppers’ Favor?
Last month, the company raised its guidance for EBITDA and adjusted EPS. It anticipates adjusted EBITDA to be within the $250-$260 million range, an improvement from its previous projection of $250 million and an increase from the $228.1 million reported in the previous year. Likewise, adjusted EPS is expected to be in the $4.30-$4.60 range compared with the earlier estimate of $4.40. The figure suggests growth from the prior year's figure of $4.14.
This positive outlook is supported by various factors, including strong demand for utility poles and wood preservatives in both residential and industrial sectors, strategic pricing improvements in the rail business, and the remarkable resilience exhibited by the Carbon Materials and Chemicals segment in managing unforeseen market disruptions. These factors inspire confidence that adjusted EBITDA will surpass the $250 million mark, aligning with the company's unwavering commitment to achieving its ambitious long-term goal of reaching $300 million in adjusted EBITDA by 2025, reaffirming its dedication to long-term success.
In the second quarter, the company reported adjusted earnings per share of $1.26, surpassing the Zacks Consensus Estimate of $1.08. The metric calls for an increase from 97 cents in the previous year. Total revenues amounted to $577.2 million, indicating a 15% year-over-year increase and surpassing the consensus mark of $531 million. This exceptional performance was driven by record sales in the Railroad and Utility Products and Services and Performance Chemicals segments, attributed to higher pricing and increased volumes. The Carbon Materials and Chemicals segment also contributed positively due to price increases.
The consensus estimate for earnings for the current year for KOP has been revised upward by 1.1% in the past 60 days. The Zacks Consensus Estimate for 2023 earnings is pegged at $4.45 per share, suggesting a 7.5% growth from the previous year’s levels.
In the past 60 days, the Zacks Consensus Estimate for Westrock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 14.4% in the past year.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 53.7% in a year.
The Zacks Consensus Estimate for ESI’s current-year earnings has been revised 1% upward over the past 60 days. ESI beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 1.1%. The company’s shares have surged 16.1% in the past year.
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Koppers (KOP) Shares Up 11% in 6 Months: What's Driving It?
Koppers Holdings Inc.’s (KOP - Free Report) shares have rallied 11.1% in the last six months. Owing to the upside, the stock outperformed its industry’s fall of 8.6% over the same time frame. The company has topped the S&P 500’s roughly 5.4% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in Koppers’ Favor?
Last month, the company raised its guidance for EBITDA and adjusted EPS. It anticipates adjusted EBITDA to be within the $250-$260 million range, an improvement from its previous projection of $250 million and an increase from the $228.1 million reported in the previous year. Likewise, adjusted EPS is expected to be in the $4.30-$4.60 range compared with the earlier estimate of $4.40. The figure suggests growth from the prior year's figure of $4.14.
This positive outlook is supported by various factors, including strong demand for utility poles and wood preservatives in both residential and industrial sectors, strategic pricing improvements in the rail business, and the remarkable resilience exhibited by the Carbon Materials and Chemicals segment in managing unforeseen market disruptions. These factors inspire confidence that adjusted EBITDA will surpass the $250 million mark, aligning with the company's unwavering commitment to achieving its ambitious long-term goal of reaching $300 million in adjusted EBITDA by 2025, reaffirming its dedication to long-term success.
In the second quarter, the company reported adjusted earnings per share of $1.26, surpassing the Zacks Consensus Estimate of $1.08. The metric calls for an increase from 97 cents in the previous year. Total revenues amounted to $577.2 million, indicating a 15% year-over-year increase and surpassing the consensus mark of $531 million. This exceptional performance was driven by record sales in the Railroad and Utility Products and Services and Performance Chemicals segments, attributed to higher pricing and increased volumes. The Carbon Materials and Chemicals segment also contributed positively due to price increases.
The consensus estimate for earnings for the current year for KOP has been revised upward by 1.1% in the past 60 days. The Zacks Consensus Estimate for 2023 earnings is pegged at $4.45 per share, suggesting a 7.5% growth from the previous year’s levels.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. price-consensus-chart | Koppers Holdings Inc. Quote
Other Key Picks
Some other top-ranked stocks in the Basic Materials space are WestRock Company (WRK - Free Report) and The Andersons Inc. (ANDE - Free Report) , both sporting a Zacks Rank #1 (Strong Buy) and Element Solutions Inc (ESI - Free Report) , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Westrock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 14.4% in the past year.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE shares have rallied around 53.7% in a year.
The Zacks Consensus Estimate for ESI’s current-year earnings has been revised 1% upward over the past 60 days. ESI beat the Zacks Consensus Estimate in three of the last four quarters, with the average earnings surprise being 1.1%. The company’s shares have surged 16.1% in the past year.