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Koppers Holdings Inc. (KOP)
NYSE:KOP

Koppers Holdings (KOP) AI Stock Analysis

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Koppers Holdings

(NYSE:KOP)

Rating:64Neutral
Price Target:
$33.00
▼(-2.05%Downside)
Koppers Holdings' overall score reflects a balance of mixed financial performance, positive technical indicators, and strategic corporate initiatives. While high leverage and valuation concerns weigh on the score, the company's efforts to enhance operational efficiency and strategic flexibility are positive factors.
Positive Factors
Operational Efficiency
CMC's exit of the phthalic anhydride business in the U.S. reduced the complexity of operations and improved the cost structure, expecting profitability to improve due to lower raw material costs.
Profitability
RUPS benefitting from price increases and reduced operating costs led to the best profit metrics in the crossties business since 2016.
Strategic Developments
Koppers is currently at an inflection point in its strategy with capital projects ending and expected to return significant improvement in the near term with long-term upside potential.
Negative Factors
Financial Expectations
KOP reported Q4/24 financial results that were less than both analyst and consensus expectations.
Market Share
The Performance Chemicals segment is challenged with market share losses and economic uncertainty as headwinds.
Sales Performance
Consolidated sales of $456.6 million decreased by 8.3% compared with $497.6 million.

Koppers Holdings (KOP) vs. SPDR S&P 500 ETF (SPY)

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 primarily through three main business segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC). The RUPS segment provides treated wood products and related services to the railroad and utilities industries, which includes crossties, switch ties, and utility poles. The Performance Chemicals segment supplies wood preservation chemicals that are used for residential and industrial applications. The Carbon Materials and Chemicals segment produces carbon pitch and other chemicals derived from coal tar, used in the production of aluminum and steel. Koppers' earnings are significantly influenced by long-term contracts and partnerships with major companies in the railroad, utility, and industrial sectors, ensuring a steady demand for its products and services.

Koppers Holdings Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q1-2025)
|
% Change Since: 29.13%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
Despite a decline in sales, Koppers reported improved profitability and strong margins through cost reductions and efficiency measures. The company received recognition for its sustainability efforts and improved safety performance. However, challenges such as decreased sales in key segments and broader economic uncertainty remain a concern.
Q1-2025 Updates
Positive Updates
Improved Adjusted EBITDA and Margin
Adjusted EBITDA for the first quarter was $55.5 million, up from $51.5 million in the prior year. The overall adjusted EBITDA margin improved to 12.2% from 10.3%, marking the strongest Q1 margin since 2021.
Reduction in SG&A Costs
The company reduced its SG&A costs by $4.1 million compared to Q1 2024, benefiting from a 5% reduction in the global employee base.
Recognition for Sustainability Efforts
Koppers was named to USA Today's list of America's Climate Leaders for the third consecutive year and received a Chemical Safety Excellence Award from CSX.
Strong Safety Performance
31 out of 41 facilities operated accident-free for the quarter, with certain international branches achieving zero recordable incidents.
Positive Developments in CMC Segment
Despite lower sales, the CMC segment reported improved profitability with adjusted EBITDA of $10 million compared to $4 million in the prior year due to cost reductions.
Negative Updates
Sales Decline
Consolidated sales decreased by $41 million or 8% from the prior year quarter, with significant decreases in PC and CM&C segments.
Performance Chemicals Volume Decrease
PC segment sales were down by $29 million or 19.5%, with a 21.5% volume decrease in the Americas due to market share shifts and weather impacts.
Termination of Pension Plan
Cash flow was negatively impacted by a $14 million payment associated with the termination of the U.S. pension plan.
Challenging Economic Conditions
Broader economic uncertainty and high interest rates are impacting business performance, with mixed messages from the customer base regarding demand.
Company Guidance
During Koppers' first quarter 2025 earnings call, the company provided comprehensive guidance while highlighting several key metrics. Despite a decrease in sales from $497.6 million in the prior year to $456.5 million, Koppers achieved an adjusted EBITDA of $55.5 million, up from $51.5 million in the previous year, improving its adjusted EBITDA margin to 12.2% from 10.3%. The company reported a first-quarter diluted loss per share of $0.68, a decline from the $0.59 earnings per share in the prior year, attributed to restructuring charges and pension plan termination losses. However, adjusted earnings per share rose to $0.71 from $0.62. Cash flow used in operations was $22.7 million, including a $14 million pension-related payment, compared to $12.3 million in the prior year. Capital expenditures were reduced to $10 million from $25.8 million. Koppers maintained its 2025 adjusted EBITDA forecast at $280 million and projected sales between $2 billion and $2.2 billion. The company also underscored its commitment to sustainability and safety, with 31 out of 41 facilities operating accident-free in the quarter.

Koppers Holdings Financial Statement Overview

Summary
Koppers Holdings faces challenges with declining revenues and high leverage. While it maintains operational efficiency, its profitability and cash flow generation are constrained. The high debt levels present a risk, but the company shows resilience with moderate cash flow management. Improvements in revenue and debt management are needed to enhance financial stability.
Income Statement
65
Positive
Koppers Holdings shows a mixed financial performance in recent periods. The gross profit margin for TTM (Trailing-Twelve-Months) is 20.11%, with a net profit margin of 1.24%, indicating low profitability. Revenue has declined compared to the previous year, showing a negative growth rate of -1.97%. EBIT and EBITDA margins stand at 6.79% and 8.77% respectively, reflecting moderate operational efficiency amidst challenging market conditions.
Balance Sheet
60
Neutral
The company's balance sheet reflects a high debt-to-equity ratio of 2.15, which poses a leverage risk. The return on equity (ROE) for TTM is at 5.12%, signifying modest returns to shareholders. The equity ratio is 26.34%, highlighting a relatively low proportion of equity financing, which could affect financial stability.
Cash Flow
58
Neutral
Koppers Holdings' cash flow performance is under pressure, with a free cash flow growth rate of 3.81% for TTM, indicating constrained cash generation. The operating cash flow to net income ratio is 4.27, showing strong cash conversion relative to net income. However, the free cash flow to net income ratio is 1.71, suggesting limited cash available after capital expenditures.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.05B2.09B2.15B1.98B1.68B1.67B
Gross Profit412.70M422.60M366.60M344.60M334.10M360.40M
EBITDA179.80M213.00M252.60M196.30M217.80M213.10M
Net Income25.50M52.40M89.20M63.40M85.20M89.10M
Balance Sheet
Total Assets1.66B1.89B1.84B1.71B1.66B1.60B
Cash, Cash Equivalents and Short-Term Investments45.50M43.90M66.50M33.30M45.50M38.50M
Total Debt875.10M1.02B930.70M904.50M875.10M878.40M
Total Liabilities1.25B1.40B1.33B1.31B1.25B1.25B
Stockholders Equity406.60M488.70M498.90M399.40M406.60M341.70M
Cash Flow
Free Cash Flow43.60M42.00M25.60M-3.00M-22.00M57.30M
Operating Cash Flow109.00M119.40M146.10M102.30M103.00M127.10M
Investing Cash Flow-165.10M-173.30M-116.00M-114.80M-89.50M5.60M
Financing Cash Flow41.40M35.70M2.60M4.80M-4.00M-128.70M

Koppers Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price33.69
Price Trends
50DMA
30.05
Positive
100DMA
29.11
Positive
200DMA
31.74
Positive
Market Momentum
MACD
0.79
Negative
RSI
63.44
Neutral
STOCH
87.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KOP, the sentiment is Positive. The current price of 33.69 is above the 20-day moving average (MA) of 32.36, above the 50-day MA of 30.05, and above the 200-day MA of 31.74, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 63.44 is Neutral, neither overbought nor oversold. The STOCH value of 87.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SCSCL
67
Neutral
$1.34B24.164.65%2.60%-0.16%47.70%
67
Neutral
$986.16M17.67-1.64%2.23%-115.70%
OEOEC
65
Neutral
$633.03M24.685.55%0.74%-2.31%-69.16%
KOKOP
64
Neutral
$674.14M29.425.08%0.95%-4.09%-66.97%
MTMTX
62
Neutral
$1.88B11.37-1.45%0.74%-3.82%-126.04%
55
Neutral
$1.71B-88.14%-17.68%-214.32%
44
Neutral
C$979.74M-6.70-13.35%2.68%17.20%-32.62%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KOP
Koppers Holdings
33.69
-1.29
-3.69%
MTX
Minerals Technologies
59.10
-22.30
-27.40%
SCL
Stepan Company
59.25
-22.15
-27.21%
OEC
Orion Engineered
11.25
-9.96
-46.96%
NGVT
Ingevity
46.76
4.82
11.49%
ECVT
Ecovyst
8.40
-0.69
-7.59%

Koppers Holdings Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Koppers Holdings Amends Credit Agreement for Flexibility
Positive
Jun 18, 2025

On June 17, 2025, Koppers Inc. amended its Credit Agreement, extending the maturity date of its $800 million revolving credit facility to June 17, 2030, or 91 days before the maturity of its secured term loan facility. The amendment also adjusts the financial covenant and interest rate margins, enhancing Koppers’ financial flexibility and lowering borrowing costs, reflecting confidence from banking partners.

The most recent analyst rating on (KOP) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on Koppers Holdings stock, see the KOP Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Koppers Holdings Appoints James Sullivan as President
Positive
May 29, 2025

On May 29, 2025, Koppers Holdings Inc. announced the appointment of James A. Sullivan as President and Chief Transformation Officer, effective June 1, 2025. This new role is part of the company’s Catalyst Initiative, aimed at driving enterprise-wide transformation and improving performance. Sullivan, who has been with Koppers since 2013, will lead the Transformation Office to implement strategic changes and enhance the company’s margin and cash flow profile.

The most recent analyst rating on (KOP) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on Koppers Holdings stock, see the KOP Stock Forecast page.

Shareholder MeetingsFinancial Disclosures
Koppers Holdings Reports Q1 2025 Financial Results
Negative
May 9, 2025

On May 8, 2025, Koppers Holdings Inc. held its Annual Meeting of Shareholders, where shareholders approved the Amended and Restated 2020 Long Term Incentive Plan and elected eight directors for one-year terms. Additionally, the company reported its first quarter 2025 financial results, showing a decrease in net sales to $456.5 million from $497.6 million in the prior year quarter. Despite a net loss of $13.9 million, adjusted EBITDA increased to $55.5 million, driven by cost reduction measures and improved performance in the RUPS and CMC segments.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 24, 2025