High Grade Basic Materials Weekly: Week ended July 24, 2026

Research evidence excerpt

High Grade Basic Materials Weekly: Week ended July 24, 2026

erg Basic materials outperformed this week

Block Cave is progressing on schedule, following the September 2025 mud rush incident.

While the on-schedule progress modestly reduces the overhang we flagged last quarter, 5 0

from a relative value perspective, we still do not believe FCX's current spreads -5

adequately compensate investors given the remaining Grasberg execution risk, with full -10 -15

ramp still ~18 months away. Accordingly, we remain UW. Corp Building Chems Metals Basics Paper

Source: ICE Data Indices, LLC

Builder news: DHI, PHM earnings. S&P revision on LEN BofA GLOBAL RESEARCH

This week, DHI and PHM reported 2Q26 earnings. DHI earnings beat consensus and

home sales gross margins were ahead of April guidance despite soft demand. 2026

Exhibit 2: YTD Excess Return (bps)

revenue and delivery guidance were lowered, though 4Q26 margins were guided ahead Basic materials outperformed YTD

of forecasts and stable q/q. Our credit view is unch'd as margin resilience offsets the

guidance cut, and we remain OW on attractive spread discount vs Single-A peers. PHM's 150100

update was more upbeat, with earnings above consensus, gross margins well above April 50

guidance, and 2026 guidance affirmed. PHM's earnings reinforce our view that the 0 Corp Building Metals Paper Basics Chems

company is among the best positioned builders in our coverage, supported by its buyer Source: ICE Data Indices, LLC

mix and build-to-order (BTO) shift. While spreads appear cheap, we attribute this to poor BofA GLOBAL RESEARCH

secondary liquidity and remain MW. Aside from earnings, S&P revised LEN's outlook to

stable from positive and affirmed its BBB rating on revenue decline and margin