JPM | Industrial Spec Sales - Sunday Machinations: Some stocks get all the luck.....

Research evidence excerpt

JPM | Industrial Spec Sales - Sunday Machinations: Some stocks get all the luck.....

eat and raise - which prompted us to upgrade the stock to OW (note is here) -

and Saint Gobain produced a 3% beat versus consensus on Thursday evening which was rewarded with a sharp move higher for

the shares on Friday. Underperformance of heavy side over the week could have been explained by Heidelberg Materials

disappointing results - with North American cement margins once again coming in light, causing a small cut to forecasts.

Holcim’s results on Friday, however were a beat and raise - but this didn’t prove to be enough to see the shares push on. It’s worth

highlighting that we expect a strong set of results from Rockwool (not reporting until August 19th) with some chance that we get

an ad-hoc pre-release before then.

Chemicals was perhaps the most dramatic sector over the week - helped a bit by the majority of the reportign coming on re-

gross Thursday. I’m giving myself as little pat on the back for the Umicore push last week - results were good and there is more

upside to come - but also smarting from the massive move higher in DSM Firmenich. Regular readers will know that I have

written a lot about the pre-buy in the Spec Chemcs channels and the risk of H2 warnings. We certainly didn't get that this week

with both IMCD and DSFIR beating expectations and then saying not only that June had been the best trading month in the

quarter and that July trading was also strong. This came alongside better results for many of the FMCG companies (which I am

able to absorb via my proximity to the excellent Olivia Petronilho). Unilever, Magnum, Campari and L’Oreal all did well - and

this has sparked a debate as to whether the spec chems are in a ‘back to normal’ growth path.