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06 Dec 2021
The 2022 lightside playbook
Compagnie de Saint-Gobain SA (SGO:PAR), 0 | Wienerberger AG (WIE:WBO), 0 | Sika AG (SIKA:SWX), 0 | Ferguson Plc (FERG:LON), 16,950 | Travis Perkins plc (TPK:LON), 762 | Geberit AG (GEBN:SWX), 0 | Kingspan Group Plc (KRX:DUB), 0 | ROCKWOOL A/S Class B (ROCK.B:CSE), 0 | Armstrong World Industries, Inc. (AWI:NYS), 0 | Trex Company, Inc. (TREX:NYS), 0 | Owens Corning (OC:NYS), 0 | Ibstock Plc (IBST:LON), 149 | Forterra Plc (FORT:LON), 161 | Armstrong World Industries Inc Shs Unsponsored Brazilian Depository Receipt Repr 1 Sh (AWII34:BSP), 0 | ROCKWOOL A/S Class B (0M0A:LON), 0 | Invesco US Treasury Bond 7-10 Year UCITS ETF (TREX:LON), 0 | Wienerberger AG (0MKZ:LON), 0
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The 2022 lightside playbook
Compagnie de Saint-Gobain SA (SGO:PAR), 0 | Wienerberger AG (WIE:WBO), 0 | Sika AG (SIKA:SWX), 0 | Ferguson Plc (FERG:LON), 16,950 | Travis Perkins plc (TPK:LON), 762 | Geberit AG (GEBN:SWX), 0 | Kingspan Group Plc (KRX:DUB), 0 | ROCKWOOL A/S Class B (ROCK.B:CSE), 0 | Armstrong World Industries, Inc. (AWI:NYS), 0 | Trex Company, Inc. (TREX:NYS), 0 | Owens Corning (OC:NYS), 0 | Ibstock Plc (IBST:LON), 149 | Forterra Plc (FORT:LON), 161 | Armstrong World Industries Inc Shs Unsponsored Brazilian Depository Receipt Repr 1 Sh (AWII34:BSP), 0 | ROCKWOOL A/S Class B (0M0A:LON), 0 | Invesco US Treasury Bond 7-10 Year UCITS ETF (TREX:LON), 0 | Wienerberger AG (0MKZ:LON), 0
- Published:
06 Dec 2021 -
Author:
Bromehead Yves YB | Roger Paul PR | Speak George GS | Whitworth Robert RW -
Pages:
141
The 2022 lightside playbook
Is it time to board the lightside wagon, with buzzing non-residential trends, a hot EU housing market, roaring auto production? Or will sky-high energy prices, head-spinning wage inflation, and a pause in US housing derail the story? Our 2022 lightside inflation playbook provides a comprehensive view on winners and losers as the sector reaches a crossroads.
On the cusp of a non-resi upcycle = KSP (+), AWI (+ from =)
Leading indicators have hardly ever looked as bright, leaving the US and European non-residential sectors poised to grow faster than other construction end-markets. Kingspan and AWI are our top picks despite recent softness in order intakes for the former. Sika also screens well.
Roaring auto production = SGO (+), SIKA (+)
The auto industry is back and it''s back with a vengeance, with double-digit production growth rates in sight. The industry has a bright future following three years of hiccups, regulatory bottlenecks, and a chip shortage crisis. Saint-Gobain and Sika are best positioned in our view.
Take a gap year from the US = FERG (= from +) downgrade to Neutral
Housing indicators have turned red recently, with signs of pressure in both the new and existing housing markets. Whilst we believe this is a transitory headwind, we take profit on Ferguson following a very strong performance YTD.
Inflation biting margins = GEBN (-), ROCKB (-)
We stay Underperform on Geberit and Rockwool as ramping energy costs, wage inflation (notably in Germany) and a tougher comparison base reduce our upside vs the rest of the sector.
Your house, my house, our house = WIE (+), IBST (+), FORT (+)
The EU housing market remains buoyant with no signs of slowdown. We keep our Outperform rating on superior pricing power brick companies such as Wienerberger, Ibstock and Forterra.