Construction & Rental Equipment: May Dodge Construction Starts and the latest mega project starts

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Construction & Rental Equipment: May Dodge Construction Starts and the latest mega project starts

r. However, the stock derated materially due to noise around the potential

dilution of the EU ETS and collapse of carbon prices. We believe that the sell-off has been overdone and the risk-reward is

skewed to the upside. This valuation gap should unwind over the next month when the EU publishes their ETS policy reform

proposals where we believe the outcome will be better than the worst case being baked into the share price, leading to a near

term rerating. We rate Sika Outperform, but the stock has been weak, driven by the US softness and double guidance cut in

2025. Sika is now guiding for 1-4% in local currency growth for FY26, and we believe guidance shows cautious optimism, with

moderate growth and margin expansion. We have become incrementally bullish after the Q1’26 results beat and believe Sika

is at the cusp of rerating because with execution and delivery (of bolt-ons, Fast Forward targets, MBCC synergies, shareholder

returns, etc.), investor confidence will improve. We appreciate Sika’s leadership in the attractive construction chemicals

segment the innovative and differentiated products which allows them to outperform the market. The current weakness

provides an attractive entry point. We rateSaint Gobain Market-Perform, as the current price reflects a balanced view of the

positive and the negatives. We came out of their CMD in early Oct feeling incrementally positive on the company, however, the

stock is going to remain under pressure due to the French political uncertainty. Rockwool (Outperform) is in the Goldilocks’

sweet spot, they are the dominant leader in the niche stonewool insulation market which is too small for big companies to go