Koppers (KOP) Up 22% in 3 Months: What's Driving the Stock?
Koppers Holdings Inc.’s KOP shares have popped 21.6% over the past three months. The company has also outperformed its industry’s rise of 11.8% to over the same time frame.
Koppers, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $574.7 million and average volume of shares traded in the last three months is around 144.5K.
Let’s take a look into the factors behind the stock’s price appreciation.
What’s Aiding KOP?
Strong third-quarter results, buoyant outlook and upbeat prospects have contributed to the run-up in the company’s shares. Koppers’ adjusted earnings and revenues for the third quarter topped the respective Zacks Consensus Estimate.
The company benefited from sustained demand for copper-based preservatives in the United States and pent-up demand in international markets in the third quarter. It also saw improved demand for utility poles in Australia and crosstie disposal services in the United States in the quarter.
The Pennsylvania-based company also raised its earnings outlook for 2020. It now sees adjusted earnings per share for 2020 in the band of $3.65-$3.90, up from its prior expectation of $3.25-$3.50. The company also increased its adjusted EBITDA guidance to the band of $204-$210 million for the year from its earlier view of $196-$204 million.
Koppers is seeing strong demand for residential wood treatment preservatives in most geographic regions. The company also plans to cut debt by around $125 million in 2020 leveraging strong cash flows and improved working capital management.
Earnings estimates for Koppers have also been going up over the past two months. The Zacks Consensus Estimate for the current year has increased 12.3%. The consensus estimate for 2021 has also been revised 11.5% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
The Zacks Consensus Estimate for current-year earnings for Koppers is currently pegged at $3.84, reflecting an expected year-over-year growth of 16%. Moreover, earnings are expected to register a 11.3% growth in 2021.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. price-consensus-chart | Koppers Holdings Inc. Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Bunge Limited BG, BHP Group BHP and Silvercorp Metals Inc. SVM.
Bunge has an expected earnings growth rate of 43% for the current year. The company’s shares have gained around 12% in the past year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BHP Group has a projected earnings growth rate of 32.4% for the current fiscal year. The company’s shares have gained around 20% in a year. It currently carries a Zacks Rank #2.
Silvercorp has an expected earnings growth rate of 40% for the current fiscal. The company’s shares have gained around 16% in the past year. It currently carries a Zacks Rank #2.
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