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 Q2. Today, we are looking at building materials stocks, starting with Sherwin-Williams (NYSE: SHW).
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 8 building materials stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.2% on average since the latest earnings results.
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 $6.31 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with full-year EPS guidance missing analysts’ expectations.
Interestingly, the stock is up 8.8% since reporting and currently trades at $372.18.
Read our full report on Sherwin-Williams here, it’s free.
Best Q2: 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 $424.6 million, up 16.3% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 17.5% since reporting. It currently trades at $198.43.
Is now the time to buy Armstrong World? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $1.45 billion, flat year on year, falling short of analysts’ expectations by 3.2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 3.1% since the results and currently trades at $396.20.
Read our full analysis of Carlisle’s results here.
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 $1.05 billion, up 1% year on year. This print surpassed analysts’ expectations by 1.7%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but full-year EPS guidance slightly missing analysts’ expectations.
Valmont had the weakest full-year guidance update among its peers. The stock is up 13.8% since reporting and currently trades at $377.91.
Read our full, actionable report on Valmont here, it’s free.
Tecnoglass (NYSE: TGLS)
The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $255.5 million, up 16.3% year on year. This result beat analysts’ expectations by 4.3%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is down 7.1% since reporting and currently trades at $72.74.
Read our full, actionable report on Tecnoglass here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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