Investing.com -- Goldman Sachs favours businesses whose earnings are supported by pricing power and market structure rather than an end-market demand recovery. Within European building materials, it highlights two groups of preferred stocks.
Goldman sees the most resilient price-cost dynamics at both companies, particularly into 1Q27 pricing.
European heavyside markets remain supported by capacity constraints and COâ‚‚-related supply discipline, which should help protect margins as energy hedges roll off and pricing reaccelerates. These are the defensive, structural picks.
Sika and Rockwool offer the greatest upside if energy costs normalise, with more than 10% upside to 2027E EBITDA versus VA consensus.
Both trade more than one standard deviation below their 10-year average PE multiples, suggesting valuation support.
Sika benefits from a more specialised construction chemicals offering, while Rockwool's category leadership should support pricing realisation. Goldman views this as the most attractive medium-term risk-reward.
Rockwool faces low-to-mid-single-digit downside to 4Q26 base-case EBITDA if gas and power prices stay elevated, given its European footprint and unhedged energy exposure. Goldman's forecasts already sit below consensus across much of the sector.
Original Article
Goldman Sachs Preferred Picks in EU Building Materials Hinge on Pricing Power
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