DAVY VIEW

Upcoming sector results have been well flagged, so we expect the companies to major on self-help, cash generation and sustainability. That combination still leaves one clear winner in CRH. The stock has done well and for good reason and we expect the outperformance to continue. That view is backed by solid developed end-markets where pricing remains robust. By contrast, emerging markets are increasingly mixed and we expect to see greater price volatility in oversupplied regions. This, combined with a less benign cost environment, the potential impact of the coronavirus and the tough H1 comparison base could lean on organic growth estimates at HeidelbergCement (HEI) and LafargeHolcim (LHN). We cut HEI to ‘Neutral’, seeing earnings risk and no strategic catalyst for outperformance.