As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at building materials stocks, starting with Carlisle (NYSE: CSL).
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 1.2% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.2% since the latest earnings results.
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. This print fell short of analysts’ expectations by 1.9%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA and organic revenue estimates.
Carlisle delivered the weakest performance against analyst estimates of the whole group. The stock is down 6.8% since reporting and currently trades at $350.49.
Read our full report on Carlisle 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 10.7% since reporting. It currently trades at $241.50.
Is now the time to buy Vulcan Materials? Access our full analysis of the earnings results here, it’s free.
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, in line with analysts’ expectations. It was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations.
As expected, the stock is down 7.8% since the results and currently trades at $332.32.
Read our full analysis of Sherwin-Williams’s results here.
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 result beat analysts’ expectations by 7.9%. It was a very strong quarter as it also put up an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EPS estimates.
AZEK pulled off the biggest analyst estimates beat among its peers. The stock is down 7.5% since reporting and currently trades at $46.50.
Read our full, actionable report on AZEK here, it’s free.
Armstrong World (NYSE: AWI)
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE: AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $367.7 million, up 17.7% year on year. This print surpassed analysts’ expectations by 4.4%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ organic revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
Armstrong World scored the highest full-year guidance raise among its peers. The stock is down 8% since reporting and currently trades at $134.18.
Read our full, actionable report on Armstrong World here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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