Earnings Report: Koppers Holdings Inc. Missed Revenue Estimates By 5.8%

Koppers Holdings Inc. (NYSE:KOP) shareholders are probably feeling a little disappointed, since its shares fell 4.2% to US$34.95 in the week after its latest quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at US$563m, statutory earnings were in line with expectations, at US$4.14 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Koppers Holdings after the latest results.

Check out our latest analysis for Koppers Holdings

Taking into account the latest results, Koppers Holdings' dual analysts currently expect revenues in 2024 to be US$2.15b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.87, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$2.24b and earnings per share (EPS) of US$4.54 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The average price target climbed 13% to US$64.50despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Koppers Holdings' revenue growth is expected to slow, with the forecast 2.7% annualised growth rate until the end of 2024 being well below the historical 6.4% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Koppers Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Koppers Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Koppers Holdings going out as far as 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Koppers Holdings (1 is significant!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.