Koppers Holdings Inc.’s (KOP - Free Report) stock looks promising at the moment. The company has seen its shares rally roughly 30% over the past six months, outperforming its industry’s corresponding gain of around 17%.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an attractive investment option.
What's Working in Favor of KOP?
Solid Zacks Rank & Score: Koppers currently carries a Zacks Rank #1 (Strong Buy) and also has a VGM Score of B. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three scores. Such a score allows investors to eliminate the negative aspects of stocks and select winners.
Positive Earnings Surprise History: Koppers has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 59.7%.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 for Koppers is currently pegged at $3.73 per share, reflecting an expected year-over-year growth of 43.5%. Moreover, earnings are expected to register a roughly 6.4% growth in 2018. The stock also has a long-term expected earnings per share growth rate of roughly 18%, higher than the industry average of 10%.
Superior Return on Equity (ROE): Koppers’ ROE of 119.1%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook: Koppers, in November, raised its earnings outlook for 2017 factoring in solid performance through the first three quarters of 2017. 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 is expected to gain from sustained strong performance of its Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC) units in the balance of 2017. The CMC unit is gaining 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.
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 Air Products and Chemicals, Inc. (APD - Free Report) . While Huntsman and Kronos sport a Zacks Rank #1, Air Products carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth of 8%. The stock has gained around 71% over a year.
Kronos has an expected long-term earnings growth of 5%. The stock has gained around 115% over a year.
Air Products has an expected long-term earnings growth of 14.1%. Its shares are up roughly 17% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>