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 home construction materials stocks fared in Q1, starting with Fortune Brands (NYSE:FBIN).
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 11 home construction materials stocks we track reported a mixed Q1. As a group, revenues were in line with analysts’ consensus estimates.
While some home construction materials stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.2% since the latest earnings results.
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 $1.03 billion, down 6.9% year on year. This print fell short of analysts’ expectations by 2.8%. Overall, it was a softer quarter for the company with a miss of analysts’ organic revenue estimates and a slight miss of analysts’ EBITDA estimates.
The stock is down 3.2% since reporting and currently trades at $51.03.
Read our full report on Fortune Brands here, it’s free.
Best Q1: Simpson (NYSE:SSD)
Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products.
Simpson reported revenues of $538.9 million, up 1.6% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The market seems content with the results as the stock is up 3.6% since reporting. It currently trades at $159.01.
Is now the time to buy Simpson? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.80 billion, down 6.5% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 3.3% since the results and currently trades at $63.36.
Read our full analysis of Masco’s results here.
American Woodmark (NASDAQ:AMWD)
Starting as a small millwork shop, American Woodmark (NASDAQ:AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.
American Woodmark reported revenues of $400.4 million, down 11.7% year on year. This number came in 6.6% below analysts' expectations. Overall, it was a softer quarter as it also logged full-year EBITDA guidance missing analysts’ expectations.
American Woodmark had the weakest performance against analyst estimates among its peers. The stock is down 1.3% since reporting and currently trades at $55.84.
Read our full, actionable report on American Woodmark here, it’s free.
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 $611.7 million, down 9.1% year on year. This result missed analysts’ expectations by 1%. Aside from that, it was a strong quarter as it recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The stock is up 2.5% since reporting and currently trades at $69.43.
Read our full, actionable report on Griffon here, it’s free.
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.