Stella-Jones (TSE:SJ) Releases Earnings Results

Stella-Jones (TSE:SJ) issued its earnings results on Wednesday. The company reported C$1.39 EPS for the quarter, FiscalAI reports. Stella-Jones had a net margin of 7.36% and a return on equity of 12.35%. The business had revenue of C$979.00 million for the quarter.

Here are the key takeaways from Stella-Jones’ conference call:

• Third-quarter adjusted EBITDA fell to CAD 159 million from CAD 171 million, and margin declined to 16.2% from 17.8%. Management attributed the pressure mainly to roughly CAD 10 million in higher fuel costs and delayed residential lumber price increases.
• The new Performance Optimization Program targets up to CAD 100 million in cumulative savings and incremental profitability over three years, with benefits building over time. Management expects margins to progress toward its 17.5%–18.5% target, likely closer to 2028 than 2027.
• Wood utility pole volumes grew 3% in the quarter and 5% year to date, and management expects mid-single-digit volume growth to continue into 2027. A greater share of lower-priced southern yellow pine weighed on pricing and mix, however.
• Railway tie margins improved as stronger commercial activity and a more favorable product mix offset lower Class 1 demand; contract renewals are adding commitments and opportunities in higher-value products. Management expects Q4 activity to ease seasonally but sees potential for slightly higher organic growth in the category next year.
• Steel structure expansion has weighed on throughput, but Candiac is targeting full run rate by the end of Q1 2027, with demand supporting a growing order book. Net debt fell by nearly CAD 200 million in the first nine months, leverage ended at 2.4 times, and liquidity was CAD 836 million.

Stella-Jones Stock Down 8.8%

Shares of Stella-Jones stock traded down C$5.90 on Wednesday, reaching C$61.06. The stock had a trading volume of 294,693 shares, compared to its average volume of 169,432. The company has a 50 day moving average price of C$67.42 and a 200 day moving average price of C$80.23. The company has a quick ratio of 1.20, a current ratio of 5.25 and a debt-to-equity ratio of 75.40. Stella-Jones has a 1 year low of C$58.37 and a 1 year high of C$101.31. The stock has a market capitalization of C$3.33 billion, a P/E ratio of 12.94, a P/E/G ratio of 2.40 and a beta of -0.12.

Analyst Upgrades and Downgrades

SJ has been the subject of a number of research reports. Raymond James Financial lowered their price target on Stella-Jones from C$90.00 to C$83.00 and set an “outperform” rating for the company in a report on Friday, August 7th. Royal Bank Of Canada decreased their target price on Stella-Jones from C$79.00 to C$76.00 in a research report on Wednesday, September 30th. Scotiabank lowered their target price on Stella-Jones from C$93.00 to C$85.00 and set a “sector outperform” rating for the company in a report on Wednesday, August 12th. National Bank Financial dropped their price target on Stella-Jones from C$95.00 to C$92.00 and set a “sector perform” rating on the stock in a research report on Friday, August 7th. Finally, Canadian Imperial Bank of Commerce cut their price target on Stella-Jones from C$87.00 to C$82.00 in a research note on Thursday, July 9th. Five equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company’s stock. According to data from MarketBeat.com, Stella-Jones has a consensus rating of “Moderate Buy” and an average target price of C$89.62.

About Stella-Jones

Stella-Jones Inc (TSX: SJ) is a leading North American manufacturer of products focused on supporting infrastructure essential to the electrical distribution and transmission network, and the operation and maintenance of railway transportation systems. It supplies the continent’s major electrical utility companies with treated wood poles and crossarms, steel lattice towers and steel transmission poles, as well as North America’s Class 1, short line and commercial railroad operators with treated wood railway ties.