Zacks Investment Research downgraded
Koppers Holdings Inc.
) to a Zacks Rank #5 (Strong Sell) on Jun 17, 2014. Going by the
Zacks model, companies holding a Zacks Rank #5 have strong chances
of performing worse than the broader market.
Why the Downgrade?
The company reported lackluster first-quarter 2014 results on May
5. Since then, market sentiments have been weak for Koppers
Holdings, with the share price down by 12.8%. Adjusted earnings
came in at 32 cents per share, falling short of the Zacks Consensus
Estimate of 53 cents by 39.6%. Also, the bottom-line result
decreased 40.7% year over year.
Revenues generated were $331.4 million, down 10.5% year over year
due to decline of 12.1% and 7.9% in the Carbon Materials and
Chemicals division and Railroad and Utility Products and Services
division sales respectively. Adjusted operating profit declined 30%
to $17.7 million, with margin at 5.3% versus 6.8% in the year-ago
Disappointing results led to downward revision in earnings
estimates for Koppers Holdings. Over the last 30 days, the Zacks
Consensus Estimate has decreased 5.3% to $2.51 for 2014 and by 0.6%
to $3.36 for 2015. These unfavorable revisions as well as an
average negative earnings surprise of 12.2% have made us skeptical
about Koppers Holdings' performance in the quarters ahead.
Currently, the company has
of -12.4% and -6.3% for 2014 and 2015 respectively.
Other Stocks to Consider
Koppers Holdings has a $754.9 million market capitalization. Some
better-ranked stocks in the chemical-diversified industry include
Compass Minerals International Inc.
Koninklijke DSM N.V.
KMG Chemicals Inc.
). While Compass Minerals International sports a Zacks Rank #1
(Strong Buy), both Koninklijke DSM and KMG Chemicals hold a Zacks
Rank #2 (Buy).
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