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Apr 12 2021, 06:30 IST/BST
Building Materials
Solid momentum into Q1 results; upside risks
- Sectors : Building Materials
- Companies : Buzzi Unicem | Heidelberg Materials | Saint-Gobain Group | Holcim
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 | 2240c |
| Heidelberg Materials | NEUTRAL | 04/02/20 | Outperform | 16/06/17 | 7698c |
| Holcim | OUTPERFORM | 20/04/20 | Neutral | 09/01/19 | 5688chf |
| Saint-Gobain Group | OUTPERFORM | 29/01/21 | Neutral | 02/11/20 | 5164c |
DAVY VIEW
We suspect the European building materials sector has seen a good start to 2021 despite mixed weather and rising input costs. That optimism stems from robust pricing and cost savings, which will likely drive organic profit growth and margin expansion in Q1. Europe and North America saw harsh weather impacts in February, but March has bounced back. Meanwhile, Latin America (Mexico) and Asia Pacific (China & India) continue to rebound strongly. Costs, while rising, remain manageable and we now see modest upside risk to estimates as the sector updates on Q1. The quarter is small in a full year context, and management is unlikely to get carried away on outlook, but early signs are promising. We see LafargeHolcim and Saint-Gobain as best placed into results given easier comps, further cost savings and improving markets, especially in Asia Pacific and Latin America.
