GS ups Rockwool to 'neutral' on better price-cost outlook

Rockwool A/S

13/02/2024 13:57

** Goldman Sachs upgrades Danish stone-wool manufacturer
Rockwool  ROCKb.CO  to "neutral" from "sell" citing better
price-cost outlook given lower energy prices
   ** Since mid-December, EU gas & power prices have dropped
35-40% below 2023 average levels amid above-normal weather
temperatures, the broker says 
   ** GS raises its 2024-2027 average EBIT estimates for
Rockwool by about 9% to reflect a better price-cost trend than
anticipated amid more favorable energy prices year-to-date
   ** It expects more favorable price-cost benefits in 2024,
hence raises its 2024 EBIT estimates by nearly 18% to EUR 498
million  
   ** However, it still sees weaker volumes (-3%) and price/mix
(-2%) in 2024 
   ** While the brokerage still sees risks to nominal pricing,
it does not see it likely for the prices to decline as
quickly/sharply as the energy opex tailwinds
   ** Taking into account the revised estimates, GS raises
target price on the company by nearly 20% to DKK 2,049 
   ** Out of 18 analysts that cover the stock, seven rate it
"buy" or "strong buy", eight rate "hold", and three rate "sell" 
       

 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))