Saint gobain: Saint-Gobain shares are boosted by the good results of the Irish group Kingspan

(BFM Bourse) – The Irish company published to the surprise of the market an adjusted operating profit well above expectations. In turn, Saint-Gobain, considered a comparable value, benefits.

If luxury is fueling the recovery of the CAC 40 on Tuesday, the strongest increase in the index remains the prerogative on the same day of a company far removed from this sector. Saint-Gobain, the oldest of the CAC 40 resident companies (its origins date back to the 17th century under Colbert) posted the largest increase with a gain of 3.6% around 4 p.m.

If no news specific to the company is to be noted, “the increase is probably due to a cross-reading of Kingspan, a comparable which made a very positive surprise point on its activity”, underlines a Parisian analyst. “As the end markets of these two groups are very similar, the market is hanging on to this announcement,” he adds.

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Kingspan takes the market by storm

Kingspan is an Irish group listed on the Dublin Stock Exchange, which specializes in insulation and building envelope solutions. On the occasion of a surprise update on its activity, the Emerald Island company indicated that its operating profit before certain amortizations had reached a record of 435 million euros in the first half of 2023, i.e. a tiny bit more than the figure for the same period of 2022 (434 million euros).

According to UBS, this result is 7% higher than consensus expectations. “Compared to previous expectations, volumes were slightly better as were margins,” said the Swiss bank.

The Irish company reports that performance across its markets has been mixed, with an Americas region in particular outperforming the European business. On the Dublin Stock Exchange, the Kingspan share soared 15% shortly before 4 p.m., thanks to its announcements.

Optimistic analysts

To return to Saint-Gobain, the French building materials specialist will publish its half-year results on July 26 after market close.

Several design offices are optimistic about the value. Last week, in an industry note, Stifel raised its recommendation from “hold” to “buy”, judging that building materials groups, thanks to their efforts to decarbonize their activities as well as the demand for their products, should see their market multiples appreciate significantly in the coming months.

Barclays, for its part, confirmed its opinion to “overweight”, the equivalent of “buying” from the British bank. The establishment appreciates the transformation of the group carried out since 2018 via asset rotations which have reoriented the company in promising fields, such as construction chemicals.

“We consider that its exposure to renovation will be structurally stronger in the future and estimate that today, the product categories likely to grow faster than their end markets represent around 40% of the group’s operating profit”, a also argues the bank.

Julien Marion – ©2023 BFM Bourse