Looking back on building materials stocks’ Q4 earnings, we examine this quarter’s best and worst performers, including AZEK (NYSE:AZEK) and its peers.
Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.
The 9 building materials stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.6% since the latest earnings results.
AZEK (NYSE:AZEK)
With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.
AZEK reported revenues of $285.4 million, up 18.7% year on year. This print exceeded analysts’ expectations by 7.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EPS estimates.
AZEK pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.9% since reporting and currently trades at $46.83.
We think AZEK is a good business, but is it a buy today? Read our full report here, it’s free.
Best Q4: Vulcan Materials (NYSE:VMC)
Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Vulcan Materials reported revenues of $1.85 billion, up 1.1% year on year, outperforming analysts’ expectations by 2.1%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates.
The stock is down 9.4% since reporting. It currently trades at $244.87.
Is now the time to buy Vulcan Materials? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Carlisle (NYSE:CSL)
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE:CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Carlisle reported revenues of $1.12 billion, flat year on year, falling short of analysts’ expectations by 1.9%. It was a slower quarter as it posted a miss of analysts’ EBITDA and organic revenue estimates.
Carlisle delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.3% since the results and currently trades at $356.04.
Read our full analysis of Carlisle’s results here.
Sherwin-Williams (NYSE:SHW)
Widely known for its success in the paint industry, Sherwin-Williams (NYSE:SHW) is a manufacturer of paints, coatings, and related products.
Sherwin-Williams reported revenues of $5.30 billion, flat year on year. This number was in line with analysts’ expectations. Taking a step back, it was a slower quarter as it logged full-year EPS guidance missing analysts’ expectations significantly and a slight miss of analysts’ organic revenue estimates.
The stock is down 5.5% since reporting and currently trades at $340.78.
Read our full, actionable report on Sherwin-Williams here, it’s free.
Valmont (NYSE:VMI)
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.
Valmont reported revenues of $1.04 billion, up 2.1% year on year. This result beat analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ organic revenue and adjusted operating income estimates.
Valmont had the weakest full-year guidance update among its peers. The stock is down 11.3% since reporting and currently trades at $283.73.
Read our full, actionable report on Valmont here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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