Koppers Meeting Its Aggressive Guidance So Far, But I Wait For A Lower Price

Jun. 05, 2025 6:19 AM ETKoppers Holdings Inc. (KOP) StockKOP
Quipus Capital
1.56K Followers
(7min)

Summary

  • Koppers delivered in-line Q1 results, with margin recovery in RUPS and CM&C offsetting a sharp decline in Performance Chemicals earnings as previously guided.
  • Despite undervaluation on forward P/E, I believe normalized long-term earnings are lower than current projections, especially as the most profitable segment faces a down cycle.
  • Elevated leverage and questionable capital allocation—stock buybacks amid rising debt—add risk, making proactive deleveraging a priority before returning cash to shareholders.
  • I maintain my Hold rating on KOP, preferring to wait for a price below $25, as cyclical weakness and margin pressures could drive the stock lower.

Trabajador de líneas eléctricas reparando líneas eléctricas usando una plataforma aérea

jacquesdurocher/iStock via Getty Images

Koppers' (KOP) 1Q25 results from last month were surprisingly in line with the very aggressive guidance issued at the end of 2024.

The company showed margin recovery in RUPS and CM&C, which compensated for a steep drop

This article was written by

Quipus Capital
1.56K Followers
Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that we would like to hold independently of how the price moves in the future. Most QC calls will be holds, and that is by design. Only a very small fraction of companies should be a buy at any point in time. However, hold articles provide important information for future investors and a healthy dose of skepticism to a relatively bullish-biased market.Disclaimer: All of the author's articles are written on an "as is" basis and without warranty. They represent the author's opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions. The author disclaims all liability for any actions taken based on the information contained in any articles published.

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