Koppers (KOP) Raises Earnings & EBITDA Guidance for 2023
Koppers Holdings Inc. KOP, a global provider of treated wood products, wood treatment chemicals, and carbon compounds, recently reaffirmed its previous sales forecast for 2023, estimating sales to reach approximately $2.1 billion. Additionally, the company has increased its guidance for both EBITDA and adjusted EPS.
The company anticipates adjusted EBITDA to be within the range of $250 million to $260 million for 2023, up from the previous projection of $250 million and an increase from the $228.1 million reported in the prior year. The adjusted EPS is also expected to be $4.30 to $4.60 per share compared with the earlier estimate of $4.40, suggesting growth from $4.14 per share achieved in the prior year.
Koppers remains steadfast in its commitment to expanding and optimizing its business operations while progressing steadily toward its long-term financial objectives.
Various key factors underpin the company's optimistic outlook. These include solid volumes for utility poles and wood preservatives in both residential and industrial sectors, recent strategic pricing improvements in the rail business, and the remarkable resilience demonstrated by the Carbon Materials and Chemicals segment in effectively managing unforeseen market disruptions. These positive dynamics collectively instill confidence that the adjusted EBITDA is poised to surpass the $250 million mark. This reinforces the company's steadfast progress towards its ambitious long-term objective of achieving $300 million in adjusted EBITDA by the year 2025, underscoring its unwavering commitment to achieving continued success.
Koppers’ shares have risen 86.3% in the past year compared with the industry's 11% rise in the same period.
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In the second quarter, Koppers’ adjusted earnings per share surged to $1.26 from 97 cents in the prior year, surpassing the expected estimate of $1.08 per share. The company's total revenues reached $577.2 million, representing a substantial 15% year-over-year increase and exceeding the consensus estimate of $531 million. This strong 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. At the same time, the Carbon Materials and Chemicals segment also contributed positively due to price increases.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. price-consensus-chart | Koppers Holdings Inc. Quote
Zacks Rank & Key Picks
Koppers currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS and Akzo Nobel N.V. AKZOY, both sporting a Zacks Rank #1 (Strong Buy), and Alamos Gold Inc. AGI, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 96% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 28.5% in the past year.
The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 78.8% in the past year.
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