From Nasdaq: 2025-01-28 11:16:00

Construction sector earnings for Q4 2024 are expected to be mixed due to various factors. While increased infrastructure spending and housing demand drive growth, challenges like rising labor costs and high interest rates may impact profitability. Some companies may see strong results, while others may face margin pressures.

Infrastructure spending and reshoring efforts are driving growth in the construction sector, particularly in industrial construction. Companies involved in large-scale projects stand to benefit, supported by initiatives like the CHIPS Act. Nonresidential construction remains strong, fueled by global trends and investments in areas like telecommunications and environmental remediation.

Residential construction continues to face challenges despite sustained demand for new homes. Mortgage rates near 7% have been offset by incentives, but margin compression and high land development costs remain concerns. Labor shortages and volatile material costs also pose challenges for the sector.

Expectations for the construction sector in Q4 2024 show a decline in earnings but a slight increase in revenues compared to the previous quarter. Challenges from the soft residential market, high expenses, and labor constraints persist. Some companies are expected to beat earnings estimates, showcasing opportunities in the sector.

Five construction stocks, including LPX, TREX, STRL, PHM, and WY, are poised to beat earnings estimates this season. Companies like Louisiana-Pacific and Trex have a history of surpassing estimates, with positive Earnings ESP indicating potential outperformance. Each stock has unique strengths in the market, offering opportunities for growth and profitability.



Read more at Nasdaq:: 5 Construction Stocks Set to Carve a Beat in Q4 Earnings