MS cuts Rockwool to 'underweight' on 2024 margin risks

Rockwool A/S

17/01/2024 10:10

** Morgan Stanley downgrades Danish stone-wool manufacturer
Rockwool  ROCKb.CO  to "underweight" from "equal-weight" citing
margin risks in 2024
    ** "Over-earning vs peers, the end of cost-push energy
inflation and tougher competition likely limits Rockwool's
ability to hold its pricing gains of the past two years," MS
says 
   ** MS sees higher relative pricing risk for Rockwool in 2024,
expecting -4% year-on-year versus -0.6% year-on-year seen by
Visible Alpha consensus 
   ** Rockwool's pricing is 29% above pre-COVID growth trends,
it says, which is again the highest among peers, but the broker
expects this gap to narrow in 2024  
   ** It also sees increased risks from competition in the
market
   ** However, according to the broker volumes could surprise
positively, as permits/starts data appear to be troughing,
expecting +2% year-on-year versus Visible Alpha consensus at -1%
year-on-year 
    ** The stock is down nearly 4% at 0955 GMT 
    ** Out of 19 analysts that cover the stock, eight rate it
"buy" or "strong buy", five rate "hold", and six rate "sell" or
"strong sell"
    
    

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