Wrapping up Q1 earnings, we look at the numbers and key takeaways for the building materials stocks, including Carlisle (NYSE:CSL) 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 7 building materials stocks we track reported a solid Q1; on average, revenues beat analyst consensus estimates by 1.3%. while next quarter's revenue guidance was in line with consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and building materials stocks have held roughly steady amidst all this, with share prices up 1% on average since the previous earnings results.
Best Q1: Carlisle (NYSE:CSL) Originally founded as Carlisle Tire and Rubber Company, Carlisle (NYSE:CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Carlisle reported revenues of $1.10 billion, up 22.8% year on year, exceeding analysts' expectations by 10.1%. Overall, it was an incredible quarter for the company with an impressive beat of analysts' organic revenue and earnings estimates.
Carlisle pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 6.7% since reporting and currently trades at $407.6.
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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 $326.3 million, up 5.2% year on year, outperforming analysts' expectations by 2.1%. It was an impressive quarter for the company with full-year revenue guidance exceeding analysts' expectations and a solid beat of analysts' organic revenue estimates.
Armstrong World delivered the highest full-year guidance raise among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 5.1% since reporting. It currently trades at $112.81.
Weakest Q1: UFP (NASDAQ:UFPI) Beginning as a lumber supplier in the 1950s, UFP (NASDAQ:UFPI) makes a wide range of building materials for the construction, retail, and industrial sectors
UFP reported revenues of $1.64 billion, down 10.1% year on year, falling short of analysts' expectations by 4.7%. It was a weak quarter for the company with a miss of analysts' volume estimates.
UFP had the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 6.1% since the results and currently trades at $108.75.
Resideo (NYSE:REZI) Holding around 3000 active and pending patents, Resideo (NYSE:REZI) provides home comfort, security, energy, and water management solutions.
Resideo reported revenues of $1.49 billion, down 4.1% year on year, in line with analysts' expectations. Looking more broadly, it was a solid quarter for the company with an impressive beat of analysts' earnings estimates.
The stock is down 3.2% since reporting and currently trades at $19.09.
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 $418.4 million, up 10.8% year on year, surpassing analysts' expectations by 1.5%. Looking more broadly, it was a good quarter for the company with a decent beat of analysts' organic revenue estimates.
AZEK had the weakest full-year guidance update among its peers. The stock is down 8.7% since reporting and currently trades at $41.01.
This content was originally published on Stock Story
