European Construction Materials: Debates into 2Q results – heavyside building materials

Research evidence excerpt

European Construction Materials: Debates into 2Q results – heavyside building materials

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22 Jul 2026 11:00:00 ET │ 18 pages

European Construction Materials

Debates into 2Q results – heavyside building materials

CITI'S TAKE

Ephrem Ravi AC

Old fashioned earnings momentum has been the key driver of relative stock +44-20-7986-2462

price performance in the heavyside building materials so far this year – with ephrem.ravi@citi.com

Holcim and Titan outperforming YTD. However the price performance in the

last month into the results suggest to us that the ‘hurdle to beat’ is lowest Omnath Sinh

in Heidelberg and could reignite momentum in the stock. The price-cost +91-22-4277-5027

spread outlook will be the key factor discussed on the call (given omnath.sinh@citi.com

expectations on volume recovery has already been kicked into ’27) and we

expect commentary that 2H will be better than 1H given price hikes pushed

through (including energy surcharges) and input cost inflation starting to

slow. The valuation differential within the sector is at multi-decade high

and in particular the HOLN-HEI valuation spread of 4 turns on EBITDA and

35% premium should narrow over the next few quarters

Earnings momentum (Holcim and Titan outperforming so far) and outlook (maybe

Heidelberg?) — Earnings momentum has been the best predictor for stock price

performance. Holcim and Titan has seen c.7% upgrades to EBITDA estimates over

the last 6 months and the share prices are up YTD while Heidelberg, Vicat and Buzzi

have seen small downgrades and the stocks are down 9-19% YTD. Given the share

price performance into results we see the hurdle for Heidelberg to beat as the lowest.

Price-cost spread (should be maintained/improved, but is it 2Q or 3Q?) — Low-