JPM | Building Broadcast: ROCKB, HEI, DG, BKG JPMC Construction Daily

Research evidence excerpt

JPM | Building Broadcast: ROCKB, HEI, DG, BKG JPMC Construction Daily

JPMe) with cement and wallboard vols performing better

than expected, partly due to easier comps for cement but also improving underlying

demand, particularly from data centers. For CY2026 the team are now forecasting

EBITDA of $755 mn (+2% vs prior), -3% y/y, on margins of 30.4% (-0.1pp vs prior). For

CY2027, the team raised their estimates +4% vs prior, so now +4% vs this year. On

cement, the company noted a stronger market due to healthy infrastructure spend and

strong data center demand in its markets, with price increases implemented April 1st in

most markets excluding the West and South but ongoing negotiations in those markets.

As such, we are forecasting cement vols +5% y/y and pricing +1% in C2026. The team

are expecting margins flat on cement for the remainder of the year vs ~1pp of margin

expansion, which could be conservative, assuming 2% of variable cost inflation for 2Q-

4Q vs flat in 1Q (JPMe). On wallboard, the company spoke to a subdued NT outlook due

to mortgage rate pressures on home sales, and the team continue to expect no meaningful

recovery in resi demand until 2027. While the mid- to long-term outlook points to solid

supply/demand factors, according to the company, the team continue to believe a material

improvement in the residential sector is needed before they see a return to volume growth

for wallboard. Based on this, the team are expecting wallboard vols and pricing to be -3%

y/y and -5% in C2026. They are raising their Dec-26 PT to $225 (from $215) which

implies a 10.6x forward EV/EBITDA multiple, largely due to their higher C2027

estimates, but keeping their Underweight rating due to greater residential exposure vs

peers.