RBC sees gradual improvement for European and US building materials stocks in Q3
KNF•RBC sees gradual quarter-on-quarter improvement across most European materials products in Q3, while expecting muted European volumes and continued US cost inflation and volatility.
1. Regional outlook
RBC expects muted European volumes due to heatwaves and rising mortgage rates. In the US, a weak residential backdrop and the absence of a meaningful storm season are driving a destocking cycle for roofing firms, while geopolitical uncertainty is expected to fuel cost inflation and volatility.
2. Stock recommendations
RBC upgraded Germany’s Heidelberg to “outperform,” saying it navigated a challenging quarter of unusual weather better than peers. It downgraded US company Knife River and French company Saint-Gobain to “sector perform” from “outperform,” citing acute cost headwinds including higher diesel and natural gas prices.
