European cement producers to enjoy improved market conditions - Barclays

Vicat SA

20/02/2024 09:24

** Barclays sees opportunities in European cement producers
due to "structurally improved market" conditions
    ** It says companies will enjoy better pricing power due to
inflation and supportive infrastructure demand trends,
especially in the West/South of Europe, while being able to
further expand margin as energy costs abate
    ** Analyst adds that "companies are gradually pulling back
on underlying capex in developed markets, pushing spend (as a
share of asset base)to record lows, and pushing free cash flow
conversion towards record highs"
    ** This strategy, alongside with already healthy balance
sheets, could push companies to increase shareholder returns,
according to Barclays
    ** It upgrades Germany's Heidelberg Materials  HEIG.DE  by
two notches to "overweight" from "underweight" on very
consistent margins and earnings stability 
    ** It upgrades Italy's Buzzi  BZU.MI  to "overweight" from
"equal weight" on its high potential for shareholder returns as
the forecasted 0.71 eur/shr base dividend could be coupled with
further 500 million euros of extra returns
    ** Barclays cuts France-based Vicat  VCTP.PA  to "equal
weight" due to the high leveraged balance sheet and Swiss Holcim
 HOLN.S  to "underweight" due to relatively prudence on the
potential value creation from the US spin-off
    
    
  

 (Reporting by Alberto Chiumento)
 ((Alberto.Chiumento@thomsonreuters.com;))