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Koppers (KOP)
:KOP
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Koppers Holdings
(NYSE:KOP)
65Neutral
Positive Factors
Cost Reduction
Koppers continued to experience improved sequential profitability in its Railroad and Carbon Materials businesses due to cost reduction initiatives.
Inventory Management
Responding to storms has brought down both Koppers’ and certain customers’ inventories, improving the chances that 2025 sales will get off to a positive start.
Profitability
Despite challenges, adjusted EBITDA was a record at $261.6 million versus $256.4 million.
Negative Factors
Financial Performance
KOP reported Q4/24 financial results that were less than both analyst and consensus expectations.
Market Share
Financial results were impacted by a market share loss in the PC business and issues with consistent rail car flow that delayed shipments.
Sales
Consolidated sales in Q4/24 of $477 million decreased by 7.1% compared with $513.2 million in Q4/23.
Koppers Holdings (KOP) vs. S&P 500 (SPY)
Market Cap
$571.35M
Dividend Yield1%
Average Volume (3M)211.95K
Price to Earnings (P/E)11.3
Beta (1Y)1.09
Revenue Growth-2.88%
EPS Growth-41.29%
CountryUS
Employees2,082
SectorBasic Materials
Sector Strength59
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)2.42
Shares Outstanding20,485,752
10 Day Avg. Volume243,620
30 Day Avg. Volume211,952
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.28
Price to Cash Flow (P/CF)1.90
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$64.00Price Target Upside129.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Koppers Holdings Business Overview & Revenue Model
Company DescriptionKoppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through three segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC). The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment also provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. The company serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction industries. Koppers Holdings Inc. was founded in 1988 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyKoppers Holdings generates revenue through its three primary segments. The Railroad and Utility Products and Services segment supplies treated wood products, such as crossties and utility poles, to the railroad and utility industries. The Performance Chemicals segment offers wood treatment chemicals that protect against decay and extend the lifespan of wood products, targeting the residential and commercial construction sectors. The Carbon Materials and Chemicals segment produces carbon pitch, creosote, and other products derived from coal tar, serving the aluminum, steel, and other industrial markets. Key revenue streams include long-term contracts with railroad operators and utility companies, as well as partnerships with industrial manufacturers. Koppers' earnings are influenced by factors such as demand for infrastructure development, regulatory requirements for treated wood products, and global economic conditions affecting industrial production.
Koppers Holdings Financial Statement Overview
Summary
Koppers Holdings shows robust revenue growth and strong cash flow generation capabilities. However, the company faces challenges with declining profitability margins and high leverage. Improving efficiency and managing debt will be crucial to enhance financial stability.Income Statement
The company has shown consistent revenue growth over the years, albeit with slight fluctuations. Gross profit margins are strong at 100% due to the nature of the reported data, but net profit margins have shown a decline from previous years, indicating rising costs or operational challenges. EBIT and EBITDA margins have also decreased, suggesting potential efficiency issues or increased operational expenses.68
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, reflecting substantial leverage that poses financial risks. While the equity ratio has improved, indicating better asset management, the return on equity has declined, showing a lower efficiency in generating returns from shareholders' equity.60
Neutral
Cash Flow
Operating cash flow remains positive and has improved over the years, indicating strong cash generation capabilities. Free cash flow has shown volatility, but recent growth suggests improved capital management. The operating cash flow to net income ratio is favorable, demonstrating efficient cash conversion.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.09B | 2.15B | 1.98B | 1.68B | 1.67B | Gross Profit |
| 422.60M | 366.60M | 344.60M | 334.10M | 360.40M | EBIT |
| 148.20M | 195.20M | 137.70M | 156.50M | 156.70M | EBITDA |
| 213.00M | 252.60M | 196.30M | 217.80M | 213.10M | Net Income Common Stockholders |
| 52.40M | 89.20M | 63.40M | 85.20M | 89.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 43.90M | 66.50M | 33.30M | 45.50M | 38.50M | Total Assets |
| 1.89B | 1.84B | 1.71B | 1.66B | 1.60B | Total Debt |
| 1.02B | 930.70M | 904.50M | 875.10M | 878.40M | Net Debt |
| 978.00M | 864.20M | 871.20M | 829.60M | 839.90M | Total Liabilities |
| 1.40B | 1.33B | 1.31B | 1.25B | 1.25B | Stockholders Equity |
| 488.70M | 498.90M | 399.40M | 406.60M | 341.70M |
| Cash Flow | Free Cash Flow | |||
| 42.00M | 25.60M | -3.00M | -22.00M | 57.30M | Operating Cash Flow |
| 119.40M | 146.10M | 102.30M | 103.00M | 127.10M | Investing Cash Flow |
| -173.30M | -116.00M | -114.80M | -89.50M | 5.60M | Financing Cash Flow |
| 35.70M | 2.60M | 4.80M | -4.00M | -128.70M |
Koppers Holdings Technical Analysis
Negative
27.89
Price Trends
29.91
Negative
32.27
Negative
34.64
Negative
Market Momentum
-0.42
Positive
41.89
Neutral
21.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KOP, the sentiment is Negative. The current price of 27.89 is below the 20-day moving average (MA) of 29.10, below the 50-day MA of 29.91, and below the 200-day MA of 34.64, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 41.89 is Neutral, neither overbought nor oversold. The STOCH value of 21.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KOP.
Koppers Holdings Risk Analysis
Koppers Holdings disclosed 38 risk factors in its most recent earnings report. Koppers Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Koppers Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.17B | 18.50 | 21.49% | ― | 1.77% | 47.48% | |
77 Outperform | $6.07B | 23.18 | 39.28% | 0.82% | 11.62% | 20.76% | |
65 Neutral | $571.35M | 11.33 | 10.61% | 1.00% | -2.88% | -41.29% | |
65 Neutral | $6.14B | 27.51 | 28.90% | ― | 5.17% | 10.39% | |
64 Neutral | $6.38B | 15.48 | 26.08% | 1.16% | 13.95% | 138.97% | |
57 Neutral | $11.81B | 40.39 | 3.22% | 4.26% | -2.63% | ― | |
47 Neutral | $2.66B | -3.11 | -22.17% | 3.33% | 3.66% | -28.13% |
* Basic Materials Sector Average
Performance Comparison
KOP
Koppers Holdings
27.89
-26.47
-48.69%
AWI
Armstrong World
139.55
17.39
14.24%
LPX
Louisiana-Pacific
91.55
9.17
11.13%
SWK
Stanley Black & Decker
76.43
-15.62
-16.97%
TREX
Trex Company
57.31
-40.66
-41.50%
AXTA
Axalta Coating Systems
32.86
-1.54
-4.48%
Koppers Holdings Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -13.33% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with record-high adjusted EBITDA and strong performance in certain segments, balanced by declines in overall sales, challenges in the Railroad Products and Services segment, and workforce reductions. While there are strategic plans for growth and efficiency improvements, challenges such as market share loss and plant closures bring uncertainty.Highlights
Record Fourth Quarter Adjusted EBITDA
Achieved record fourth quarter adjusted EBITDA of $55.2 million compared with $53.9 million in the prior year quarter, with an adjusted EBITDA margin of 11.6% versus 10.5%.
Safety and Responsibility Achievements
Half of Koppers facilities worldwide operated accident-free for the year, and the company was recognized by Newsweek as one of America's most responsible companies for the fifth consecutive year.
Record Full-Year Adjusted EBITDA
Reported full-year 2024 adjusted EBITDA of $261.6 million, representing a ninth consecutive record year in profitability with an adjusted EBITDA margin of 12.5%.
Strong Performance in Utility and Industrial Products
UIP segment achieved record fourth-quarter sales and adjusted EBITDA, with strength from hurricane response and the Brownwood acquisition.
Employee Engagement Improvement
2024 employee engagement survey results were slightly better than 2023, resulting in the highest engagement scores to date.
Lowlights
Decline in Consolidated Sales
Consolidated sales of $477 million in Q4, down from $513 million in the prior year, and full-year sales of $2.09 billion, a 3% decrease from 2023.
Disappointing Performance in Railroad Products and Services
RPS segment experienced an 18% decrease in quarterly sales volumes, contributing to a disappointing fourth quarter.
Closure of Stickney Plant
The company is winding down production at the Stickney, Illinois plant, which will result in additional charges and a potential negative impact on EBITDA.
Market Share Loss in Performance Chemicals
Experienced market share loss in the residential chemical business due to aggressive competitors and customer diversification.
Cost and Workforce Reductions
Q4 saw a 5% reduction of global employee base as part of cost-saving measures, resulting in over $10 million in expected savings for 2025.
Company Guidance
During Koppers Holdings Inc.'s fourth-quarter 2024 earnings call, CEO Leroy Ball discussed several key metrics and guidance for the upcoming year. Despite falling short of financial expectations, the company achieved record fourth-quarter adjusted EBITDA of $55.2 million with a margin of 11.6%, compared to $53.9 million and 10.5% in the prior year. Sales declined to $477 million from $513 million due to various challenges, including market share loss and demand slowdowns. Adjusted earnings per share increased to $0.77 from $0.67, while GAAP EPS was negatively impacted by restructuring charges. For the full year, consolidated sales were $2.09 billion, slightly down from $2.15 billion in 2023, with adjusted EBITDA reaching a record $261.6 million and a margin of 12.5%. The company expects 2025 to show improved earnings driven by top-line growth, efficiency gains, and cost control, forecasting sales of $2.17 billion and adjusted EBITDA of $280 million. Koppers plans to allocate free cash flow towards debt reduction and share repurchases, aiming for a net leverage ratio at or below 3 times by year-end. Additionally, the company plans to unveil its 2030 strategic plan during a virtual investor day in September.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.