The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how building materials stocks fared in Q3, 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 slower Q3. As a group, revenues were in line with analysts’ consensus estimates 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 7.6% 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 $6.36 billion, up 3.2% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.
Sherwin-Williams scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 1.7% since reporting and currently trades at $341.72.
Is now the time to buy Sherwin-Williams? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: 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 $1.35 billion, flat year on year, outperforming analysts’ expectations by 1.2%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income and organic revenue estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.4% since reporting. It currently trades at $315.89.
Is now the time to buy Carlisle? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $260.5 million, up 9.3% year on year, falling short of analysts’ expectations by 2.1%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.
As expected, the stock is down 19.7% since the results and currently trades at $44.89.
Read our full analysis of Tecnoglass’s results here.
Resideo (NYSE: REZI)
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Resideo reported revenues of $1.86 billion, up 2% year on year. This result lagged analysts' expectations by 0.6%. Overall, it was a slower quarter as it also produced full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ adjusted operating income estimates.
Resideo had the weakest full-year guidance update among its peers. The stock is down 22.3% since reporting and currently trades at $31.85.
Read our full, actionable report on Resideo here, it’s free for active Edge members.
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 $2.29 billion, up 14.4% year on year. This print topped analysts’ expectations by 0.8%. Taking a step back, it was a satisfactory quarter as it also recorded a decent beat of analysts’ adjusted operating income estimates but full-year EBITDA guidance slightly missing analysts’ expectations.
Vulcan Materials achieved the fastest revenue growth among its peers. The stock is down 3.9% since reporting and currently trades at $284.05.
Read our full, actionable report on Vulcan Materials here, it’s free for active Edge members.
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 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
