MS ups Rockwool to 'overweight' on improved industry structure

Rockwool A/S

16/04/2025 11:37

** Morgan Stanley upgrades Danish stone-wool manufacturer Rockwool ROCKb.CO to "overweight" from "equal weight", ups PT by 16% TO DKK 300 considering the already downbeat construction market and improved industry structure

** The industry is structurally in better shape versus history on pricing given consolidated supply in stone wool, disciplined market players, and market share gains for Rockwool due to fire safety/regulation, it points out

** The brokerage estimates pricing could stay at +1% year-on-year if energy costs reduce by at least -5% year-on-year, with any upside on pricing supporting a margin beat

** It sees 2025 volumes of -4% year-on-year, as, according to history, recessions typically lead to high single-digit percentage peak-to-trough volume decline for Rockwool, on average

** MS says the company benefits from stronger fundamentals

and positioning, offering more downside protection, as well as energy cost tailwind amid the choppy market environment

** The broker still sees building & construction to be relatively "immune" to tariffs given its local-for-local production but is concerned about the indirect/second-order impact from business uncertainty/sentiment

** Out of 15 analysts covering Rockwool, five rate it "buy"/"strong buy", eight "hold" and two "sell"

 (Reporting by Marta Frackowiak)

 ((marta.frackowiak@thomsonreuters.com))