Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward - Saint-GobainTop Pick(SGOB.PA)Risk Reward – Saint-Gobain (SGOB.PA)

Inexpensive exposure to defensive renovation, market share gain potential

PRICE TARGET €102.00 OVERWEIGHT THESIS

DCF: 2025-30e revenue growth of ~4% organic, 1-2% M&A. Steady margin expansion We think Saint-Gobain can lift organic

supported by portfolio mix shift and operating leverage. FY24 EBIT margin 11.4%, expanding growth above its historical average,

to 13% by 2030e. WACC 9%, terminal growth rate 2.5%. Capex grows from €2bn toward leveraging the benefits of its "Transform and

€3bn to support enlarged portfolio and growth. Grow" programme, which cut costs,

EV/EBIT: 12x 2026e vs. historical average of 10x. Re-rating reflects structural improvement in improved cash flow and is underpinned by a

returns, cash flow and cash conversion. leaner organisational structure. From here,

the 2021-25 "Grow and Impact" strategy

€99.60 should support market share gains. The

Consensus Price Target Distribution €70.00 €134.60 shares are inexpensive, especially in the

MS PT context of returns and earnings growth, and

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates provide exposure to the long-term thematic

of increased energy renovation rates linked

to decarbonisation goals, presenting a

RISK REWARD CHART AND OPTIONS IMPLIED PROBABILITIES (12M) significant growth and re-rating opportunity,

in our view.

EUR

Consensus Rating Distribution

€146.00(+79.63%)€146.00€146.00(+79.63%)(+79.63%) ProbProbProb (>146.00)~0.6%(>146.00)~0.6%(>146.00)~0.6% 76% Overweight 160

19% Equal-weight

5% Underweight

120 MS Rating

€102.00(+25.49%)€102.00€102.00(+25.49%)(+25.49%)

ProbProbProb (>102.00)~18.1%(>102.00)~18.1%(>102.00)~18.1% Source: Refinitiv, Morgan Stanley Research