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Koppers (KOP) Hits New 52-Week High: What’s Driving It?


Shares of Koppers Holdings Inc. KOP, scaled a fresh 52-week high of $48.15 on Oct 5, before pulling back to eventually close the day at $47.70.

Koppers has a market cap of roughly $989.6 million and average volume of shares traded in the last three months is around 103.5K.

Koppers has outperformed the industry over a year. The company’s shares have moved up around 48.7% compared with roughly 31.9% gain recorded by the industry.

Driving Factors

Strong second-quarter results and upbeat outlook for 2017 provided an impetus to the company’s shares. Koppers delivered a positive earnings surprise of 28.3% in the second quarter.

The company, 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-$3.30 per share for 2017, compared with its earlier expectations of $2.80- $3.00. 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 currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other stocks worth considering in the chemical space are The Chemours Company CC, FMC Corporation FMC and Air Products and Chemicals, Inc. APD.

Chemours has expected long-term earnings growth of 15.5% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC has expected long-term earnings growth of 11.3% and flaunts a Zacks Rank #1.

Air Products has expected long-term earnings growth of 12.1% and carries a Zacks Rank #2.

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