The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how UFP Industries (NASDAQ: UFPI) and the rest of the building materials stocks fared in Q2.
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 7.2% on average since the latest earnings results.
UFP Industries (NASDAQ: UFPI)
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
UFP Industries reported revenues of $1.84 billion, down 3.5% year on year. This print fell short of analysts’ expectations by 1.9%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.
“Our second quarter was largely a continuation from our first quarter as visibility remains limited, tariff uncertainty remains a challenge for consumer and business sentiment, and end market demand remains soft but stable. Despite the current environment, we continue to make progress positioning UFP as a leaner and faster growing enterprise for when markets recover,” said Will Schwartz UFP Industries CEO.
UFP Industries delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 2.9% since reporting and currently trades at $101.39.
Read our full report on UFP Industries 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 a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 16.9% since reporting. It currently trades at $197.57.
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 5.5% since the results and currently trades at $386.33.
Read our full analysis of Carlisle’s results here.
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 $2.10 billion, up 4.4% year on year. This number lagged analysts' expectations by 4.8%. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Vulcan Materials had the weakest performance against analyst estimates among its peers. The stock is up 6.7% since reporting and currently trades at $291.16.
Read our full, actionable report on Vulcan Materials 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 $6.31 billion, flat year on year. This result met analysts’ expectations. Aside from that, it was a softer quarter as it logged full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ adjusted operating income estimates.
The stock is up 7.2% since reporting and currently trades at $366.80.
Read our full, actionable report on Sherwin-Williams here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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