Koppers (KOP) Stock Up 16% in 6 Months: What's Driving It?
Koppers Holdings Inc.’s KOP shares have popped 16.1% over the past six months. The global provider of wood treatment chemicals, treated wood products and carbon compounds has also outperformed its industry’s decline of 1.4% over the same time frame. It has also topped the S&P 500’s roughly 15.7% rise over the same period.
Let’s dive into the factors behind this Zacks Rank #2 (Buy) stock’s price appreciation.
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Strong Utility Demand, Pricing Drive Koppers
Koppers delivered forecast-topping results in the first quarter of 2023 on strength across its Railroad and Utility Products and Services (RUPS) and Performance Chemicals segments. Its adjusted earnings per share (EPS) of $1.12 for the quarter trounced the Zacks Consensus Estimate of 76 cents. KOP also generated record sales of $513.4 million for the quarter, which topped the Zacks Consensus Estimate of $474 million.
Based on its better-than-expected first-quarter performance, KOP reaffirmed its sales, adjusted EBITDA and adjusted EPS guidance for 2023. It sees 2023 sales of roughly $2.1 billion, compared with $1.98 billion in 2022. Adjusted EBITDA for 2023 is projected to be roughly $250 million, compared with $228.1 million in the prior year. The company also expects adjusted EPS of around $4.40 for 2023, compared with $4.14 in 2022.
Koppers remains focused on driving improvements through the execution of its strategic initiatives and making progress toward its long-term financial goals. It remains committed to expand its business with new products and markets. The company should also benefit from its network optimization program.
The company is also gaining from actions to raise prices to counter higher raw material, transportation and labor costs. Its RUPS and Performance Chemicals units delivered record first-quarter sales on the back of price increases. It is also seeing strong demand from the U.S. utility market, which is driving profitability in the RUPS segment. Moreover, KOP remains committed to delivering strong cash flows and reducing debt.
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 L.B. Foster Company FSTR, Innospec Inc. IOSP and Linde plc LIN.
L.B. Foster currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR’s shares have gained around 9% in a year.
Innospec currently carries a Zacks Rank #2. The Zacks Consensus Estimate for IOSP’s current-year earnings has been stable over the past 60 days.
Innospec’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 11.9%, on average. IOSP's shares have gained roughly 3% in the past year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 1% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have popped roughly 30% in the past year.
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L.B. Foster Company (FSTR) : Free Stock Analysis Report
Koppers Holdings Inc. (KOP) : Free Stock Analysis Report
Linde PLC (LIN) : Free Stock Analysis Report
Innospec Inc. (IOSP) : Free Stock Analysis Report
