Koppers (KOP) Shares Surge 30% in 3 Months: What's Driving It?
Koppers Holdings Inc.’s KOP shares have rallied 30% in the last three months. Owing to the upside, the stock outperformed its industry’s fall of 2.9% over the same time frame. The company has topped the S&P 500’s nearly 10.5% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving this Zacks Rank #3 (Hold) stock.
What’s Driving Koppers?
During the third quarter, Koppers experienced a notable 34% increase in earnings compared with the previous year’s levels, reaching $1.22 per share. The company also demonstrated 3% year-over-year growth in quarterly revenues.
The Railroad and Utility Products and Services (RUPS) business played a significant role in this strong performance, achieving a remarkable 13% increase in sales and totaling $234 million. The upside can be attributed to pricing increases and higher volumes in crossties, with record sales and profitability in the domestic utility pole business contributing to the positive results.
The Performance Chemicals (PC) segment also made a substantial contribution, recording sales of $179.4 million, marking a 17% year-over-year increase. This success was driven by renegotiated customer contracts that allowed for necessary price adjustments to address higher raw material and operating costs experienced in the prior year.
Koppers provided a robust outlook for 2023, forecasting sales of approximately $2.1 billion. The company anticipates adjusted EBITDA to be in the range of $253-$257 million for the year, with adjusted earnings per share expected to be $4.35-$4.55. These projections reflect confidence in sustained profitability and growth.
In the third quarter, Koppers surpassed expectations by reporting adjusted earnings of $1.32 per share, exceeding the Zacks Consensus Estimate of $1.27. The company consistently delivered positive earnings surprises in each of the last four consecutive quarters, with an average beat of 22.3%. The Zacks Consensus Estimate for 2023 earnings is pegged at $4.48 per share, indicating an 8.2% growth from the previous year's reported figure.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. price-consensus-chart | Koppers Holdings Inc. Quote
Key Picks
Some better-ranked stocks in the Basic Materials space are Cameco Corporation CCJ, Carpenter Technology Corporation CRS and Cabot Corporation CBT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 96.4% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 54.4% in the past year.
The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 4.4% in the past 60 days. CBT beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 2.3%, on average. The stock has gained around 5.9% in a year.
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