F4Q26 Recap: Solid Demand In Cement, But Limited Pricing Momentum

研报英文原文证据摘录

F4Q26 Recap: Solid Demand In Cement, But Limited Pricing Momentum

amie start-up costs from F3Q27 to F4Q27 and baking PREV 190.1 229.5 183.4 125.3 728.3

in total a $10-12 mil headwind. *Rev. (MM)

Wallboard vols & margins normalizing. While CY25 EXP saw shares wins in 1H and losses 2H,

that dynamic normalized in F4Q26, and we expect EXP to track largely in line with the markets

where they are located. That said, they will face a tougher comp in F1Q27, but comps get much

easier afterward, and we have volumes down modestly in FY27. In a softer environment in housing,

wallboard pricing started bleeding in FY26, and the declines accelerated in F2H26, with prices down

7.9% YOY and 5.3% QOQ in F4Q. With ASPs reported net of freight, elevated freights costs drove

1% drag in F4Q, and this impact will kick in more fully in F2Q. We have not baked in traction from

the June wallboard increase, and any realization could help offset inflation. In FY27, we're baking

in ~500 bps of margin compression in wallboard, settling at still an impressive 32% EBIT margins

and in-line with pre-COVID levels.

Aggs + paperboard showing solid results. Although F4Q's EBIT margin stepped down seasonally

in concrete & aggs, margins were still 930bps higher YOY, with pricing and volume growth in both

businesses. EXP has fully lapped prior operational issues, and recent acquisitions have improved

the segment's profitability. EXP's Paperboard business also reported meaningful improvement

in margins, increasing 740bps YOY, as EXP renegotiated its supplier contract on recycled fiber.

Separately, capex is expected to come in at $490-530 mil in FY27, and we see it stepping down to

~$250 mil in FY28, driving a sharp step-up in FCF.

Philip Ng, CFA * | Equity Analyst

(212) 336-7369 | png@jefferies.com