Let’s dig into the relative performance of Griffon (NYSE:GFF) and its peers as we unravel the now-completed Q3 home construction materials earnings season.
Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential 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 home construction materials companies.
The 12 home construction materials stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 0.9%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12.2% since the latest earnings results.
Griffon (NYSE:GFF)
Initially in the defense industry, Griffon (NYSE:GFF) is a now diversified company specializing in home improvement, professional equipment, and building products.
Griffon reported revenues of $659.7 million, up 2.9% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
“We are very pleased with Griffon’s results for the fourth quarter and fiscal year. The consistent strong performance from the Home and Building Products (“HBP”) segment and improved profitability from the Consumer and Professional Products (“CPP”) segment positions us for further growth in the years ahead,” said Ronald J. Kramer, Chairman and Chief Executive Officer.
Interestingly, the stock is up 5.6% since reporting and currently trades at $71.97.
Is now the time to buy Griffon? Access our full analysis of the earnings results here, it’s free.
Best Q3: Trex (NYSE:TREX)
Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture.
Trex reported revenues of $233.7 million, down 23.1% year on year, outperforming analysts’ expectations by 3.7%. The business had an exceptional quarter with a solid beat of analysts’ adjusted operating income estimates.
Trex delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 4.5% since reporting. It currently trades at $69.46.
Is now the time to buy Trex? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: JELD-WEN (NYSE:JELD)
Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products.
JELD-WEN reported revenues of $934.7 million, down 13.2% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
JELD-WEN delivered the weakest full-year guidance update in the group. As expected, the stock is down 42.9% since the results and currently trades at $8.08.
Read our full analysis of JELD-WEN’s results here.
Masco (NYSE:MAS)
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Masco reported revenues of $1.98 billion, flat year on year. This print lagged analysts' expectations by 0.9%. More broadly, it was a mixed quarter as it also recorded organic revenue in line with analysts’ estimates but a slight miss of analysts’ EPS estimates.
The stock is down 12.3% since reporting and currently trades at $71.62.
Read our full, actionable report on Masco here, it’s free.
Fortune Brands (NYSE:FBIN)
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE:FBIN) makes plumbing, security, and outdoor living products.
Fortune Brands reported revenues of $1.16 billion, down 8.4% year on year. This number came in 6.9% below analysts' expectations. Overall, it was a softer quarter as it also logged a significant miss of analysts’ organic revenue estimates and a miss of analysts’ EPS estimates.
Fortune Brands had the weakest performance against analyst estimates among its peers. The stock is down 19.8% since reporting and currently trades at $67.59.
Read our full, actionable report on Fortune Brands here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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