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6 Reasons That Make Koppers (KOP) an Attractive Pick Now
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Koppers Holdings Inc.’s (KOP - Free Report) stock looks promising at the moment. Koppers is a leading integrated producer of treated wood products, wood treatment chemicals and carbon compounds.
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 company an attractive investment option.
What’s Working in Favor of Koppers?
Solid Rank & VGM Score: Koppers currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
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 56.6%.
An Outperformer: Koppers has outperformed the industry it belongs to over a year, partly reflecting its forecast-topping earnings performance. The company’s shares have gained 32.2% over this period, compared with roughly 26.9% gain recorded by the industry.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 for Koppers is currently pegged at $2.95 per share, reflecting an expected year-over-year growth of 13.5%. Moreover, earnings are expected to register a 13.7% 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 10.3%.
Superior Return on Equity (ROE): Koppers’ ROE of 153.5%, as compared with the industry average of 21.1%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook: Koppers, in August, raised its earnings outlook for 2017 factoring in solid performance in the first half. The company now sees adjusted earnings in the range of $3.10 to $3.30 per share for 2017, compared with its earlier expectations of $2.80 to $3.00 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 $185 million from its prior view of $180 million. 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 Performance Chemicals (PC) and Carbon Materials and Chemicals (CMC) units in the balance of 2017. The CMC unit is benefiting from lower costs resulting from the company’s restructuring actions.
Moreover, the PC division is seeing strong demand for water-borne wood treatment preservative products. The unit is expected to gain from positive trends in the repair and remodeling market.
Kraton has expected earnings growth of 7.2% for the current year.
Akzo Nobel has expected long-term earnings growth of 11.1%.
Air Liquide has expected long-term earnings growth of 8.1%.
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6 Reasons That Make Koppers (KOP) an Attractive Pick Now
Koppers Holdings Inc.’s (KOP - Free Report) stock looks promising at the moment. Koppers is a leading integrated producer of treated wood products, wood treatment chemicals and carbon compounds.
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 company an attractive investment option.
What’s Working in Favor of Koppers?
Solid Rank & VGM Score: Koppers currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
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 56.6%.
An Outperformer: Koppers has outperformed the industry it belongs to over a year, partly reflecting its forecast-topping earnings performance. The company’s shares have gained 32.2% over this period, compared with roughly 26.9% gain recorded by the industry.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 for Koppers is currently pegged at $2.95 per share, reflecting an expected year-over-year growth of 13.5%. Moreover, earnings are expected to register a 13.7% 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 10.3%.
Superior Return on Equity (ROE): Koppers’ ROE of 153.5%, as compared with the industry average of 21.1%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Outlook: Koppers, in August, raised its earnings outlook for 2017 factoring in solid performance in the first half. The company now sees adjusted earnings in the range of $3.10 to $3.30 per share for 2017, compared with its earlier expectations of $2.80 to $3.00 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 $185 million from its prior view of $180 million. 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 Performance Chemicals (PC) and Carbon Materials and Chemicals (CMC) units in the balance of 2017. The CMC unit is benefiting from lower costs resulting from the company’s restructuring actions.
Moreover, the PC division is seeing strong demand for water-borne wood treatment preservative products. The unit is expected to gain from positive trends in the repair and remodeling market.
Koppers Holdings Inc. Price and Consensus
Koppers Holdings Inc. Price and Consensus | Koppers Holdings Inc. Quote
Other Stocks to Consider
Other stocks in the basic materials space worth considering include Kraton Corporation , Akzo Nobel N.V. (AKZOY - Free Report) and Air Liquide (AIQUY - Free Report) , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kraton has expected earnings growth of 7.2% for the current year.
Akzo Nobel has expected long-term earnings growth of 11.1%.
Air Liquide has expected long-term earnings growth of 8.1%.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure.
See these buy recommendations now >>