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Koppers (KOP) Up 48% in 6 Months: What's Behind the Rally?
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Shares of Koppers Holdings Inc. (KOP - Free Report) have shot up around 48% in the last six months. The company has also significantly outperformed its industry’s gain of roughly 17% to over the same time frame.
Koppers, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $1 billion and average volume of shares traded in the last three months is around 138.9K. The company has an expected long-term earnings per share growth of 18%, higher than the industry average of 10.3%.
What’s Driving KOP?
Forecast-topping earnings performance in the last reported quarter and upbeat outlook for 2017 have contributed to a rally in Koppers’ shares. Koppers’ adjusted earnings of $1.43 per share for the third quarter outstripped the Zacks Consensus Estimate of 88 cents, translating into a positive earnings surprise of 62.5%.
Koppers, last month, raised its earnings outlook for 2017 factoring in solid performance year to date. The company now sees adjusted earnings in the range of $3.70 to $3.80 per share for 2017, up from its prior view of $3.10 to $3.30 per share. The revision is partly due to lower than expected effective tax rate.
The company also raised its adjusted EBITDA forecast for 2017 to around $195 million from roughly $185 million expected earlier. The guidance also reflects an increase from $174 million recorded in the prior year.
Koppers should gain from sustained strong performance of its Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC) units. The CMC unit is benefiting from favorable market conditions and savings benefits from the company’s restructuring actions.
While the PC division faces headwinds from raw material cost inflation, it is likely to gain from continued strong demand. The unit is expected to benefit from positive trends in the repair and remodeling market.
Huntsman has an expected long-term earnings growth of 18%. The stock has gained around 74% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 118% year to date.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 87% year to date.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
Koppers (KOP) Up 48% in 6 Months: What's Behind the Rally?
Shares of Koppers Holdings Inc. (KOP - Free Report) have shot up around 48% in the last six months. The company has also significantly outperformed its industry’s gain of roughly 17% to over the same time frame.
Koppers, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $1 billion and average volume of shares traded in the last three months is around 138.9K. The company has an expected long-term earnings per share growth of 18%, higher than the industry average of 10.3%.
What’s Driving KOP?
Forecast-topping earnings performance in the last reported quarter and upbeat outlook for 2017 have contributed to a rally in Koppers’ shares. Koppers’ adjusted earnings of $1.43 per share for the third quarter outstripped the Zacks Consensus Estimate of 88 cents, translating into a positive earnings surprise of 62.5%.
Koppers, last month, raised its earnings outlook for 2017 factoring in solid performance year to date. The company now sees adjusted earnings in the range of $3.70 to $3.80 per share for 2017, up from its prior view of $3.10 to $3.30 per share. The revision is partly due to lower than expected effective tax rate.
The company also raised its adjusted EBITDA forecast for 2017 to around $195 million from roughly $185 million expected earlier. The guidance also reflects an increase from $174 million recorded in the prior year.
Koppers should gain from sustained strong performance of its Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC) units. The CMC unit is benefiting from favorable market conditions and savings benefits from the company’s restructuring actions.
While the PC division faces headwinds from raw material cost inflation, it is likely to gain from continued strong demand. The unit is expected to benefit from positive trends in the repair and remodeling market.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. Price and Consensus | Koppers Holdings Inc. Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Huntsman Corporation (HUN - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth of 18%. The stock has gained around 74% year to date.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 118% year to date.
Westlake has an expected long-term earnings growth of 10.6%. Its shares are up roughly 87% year to date.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>