DAVY VIEW

We have lowered our Saint-Gobain (SGO) forecasts to reflect persistent weakness in the group’s industrial end-markets as well as disposals completed in Q419. We have cut our FY19 and FY20 operating income forecasts by 2% and 3% respectively. Mixed end-markets continue to hamper management’s self-help efforts, which are expected to have delivered hard cost savings of €80m in 2019. Unfortunately, with organic estimates under pressure, that feels like running hard to stand still. The stock screens well; however, in the absence of a solid recovery in industrial end-markets, we see few catalysts for the share price to outperform.