Building Materials

Darkest before the dawn? Key stock picks for 2019

Ratings

Ratings and price correct at time of issue

Company Rating Date Previous Rating Date Closing Price
Buzzi Unicem OUTPERFORM 04/04/16 Neutral 05/08/15 c
CRH OUTPERFORM 23/05/12 Neutral 12/01/12 c
Geberit NEUTRAL 08/05/14 Underperform 09/11/12 chf
Grafton Group OUTPERFORM 15/12/15 Neutral 07/09/15 p
HeidelbergCement AG OUTPERFORM 16/06/17 Neutral 05/02/14 c
Kingspan Group OUTPERFORM 12/05/11 Neutral 30/06/09 c
LafargeHolcim NEUTRAL 09/01/19 Underperform 17/11/15 chf
Saint-Gobain Group NEUTRAL 09/01/19 Outperform 07/09/15 c
SIG plc NEUTRAL 01/07/16 Outperform 15/12/15 p
Travis Perkins plc UNDERPERFORM 01/07/16 Neutral 20/10/14 p
Wienerberger OUTPERFORM 09/05/18 Neutral 09/01/17 c
Howden Joinery OUTPERFORM 29/01/15 N/A N/A p
Kingfisher NEUTRAL 20/08/18 Outperform 02/10/17 p
Ibstock plc NEUTRAL 04/08/17 Outperform 19/08/16 p
Forterra plc NEUTRAL 19/08/16 N/A N/A p
Breedon Group NEUTRAL 25/10/17 Outperform 06/03/17 p
Ferguson NEUTRAL 10/11/17 N/A N/A p

DAVY VIEW

2018 was a year to forget as the European building materials sector returned its weakest performance in seven years. Sentiment towards the sector has rarely been worse. We are more optimistic, however, given lower expectations and easing cost headwinds. Balance sheets are in good shape, prompting cash returns, while internal measures can deliver margin gains. We think the group can surprise positively in 2019 following a severe de-rating. Our top picks include CRH, Grafton and Kingspan. Further out the risk spectrum, HeidelbergCement and Wienerberger offer large upside should market sentiment improve.

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Jan 9 2019, 06:30 GMT

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