Stifel backs building materials sector over sustainability demand and stronger households

Wienerberger AG

07/07/2023 11:43

** Stifel has backed the European building materials sector
for recovery to pre-financial crash levels over the next 1-3
years, as incentives for low carbon building sustain and falls
in inflation support demand
    ** The broker believes the stimulus for decarbonisation "is
already significant and will likely remain elevated for years"
    ** Stifel also points to the negative effects of cement
exposure, with carbon credits being eliminated and rising prices
due to shortages
    ** Noting the strong performance of US building material
stocks YTD, Stifel expects European housing and light-side
exposed stocks to also do well over next 6-18 months
    ** Declining near-term inflation and mortgage costs, along
with strong demand, should support this rise
    ** "The outlook seems less bad than initially feared, and
this despite weak housing" - says Stifel as it expects European
renovation and housing exposed light-side to take over late
2023/early 2024 
    ** Building materials companies Saint-Gobain  SGOB.PA  and 
Wienerberger  WBSV.VI  are both upgraded to "buy"
    ** Stifel also upgrades target price for CRH  CRH.L  by 30%
to 65 euros ($70.7), with a reiteration to "buy"
    

 (Pierre John Felcenloben)
 ((pierrejohn.felcenloben@thomsonreuters.com))