DAVY VIEW

The macro-outlook may be gloomy, but we think our lightside building materials coverage list offers some interesting options for 2025, especially after the weak start to the year. After the recent sell-off, valuations are by no means oppressive and indeed are increasingly pricing in a particularly pessimistic outlook. Admittedly, that most important of ingredients, positive earnings momentum, may remain elusive. However, we believe there is a range of potentially consequential company-specific catalysts that offer support to investment cases and can spark equity performance. Such is the extent of the recent sell-off that much of the coverage list offers substantial upside based on our price targets. For preference, we highlight Kingspan – where there is a credible pathway to a return to profit growth and at an attractive valuation – and Stelrad, which remains on a low multiple despite highly impressive operational and strategic progress.