LIVE MARKETS-Construction to stay popular, but BofA turns selective

Adds new blog entry

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

CONSTRUCTION TO STAY POPULAR, BUT BOFA TURNS SELECTIVE

European construction was among 2025's standout gainers, and BofA expects the sector to remain popular thanks to earnings momentum, pricing strength and potential dealmaking.

The Wall Street bank sees several tailwinds: lower rates supporting a residential recovery, exposure to the German infrastructure and Ukraine's rebuild themes, and strong pricing trends in heavy-side materials.

Still, after the strong run, investors may need to be more picky, particularly on "heavy-side" names such as cement and aggregates, it says.

"After two years of rerating... we are more selective on the space," write BofA analysts including Arnaud Lehmann, as they downgrade stocks including cement maker Holcim HOLN.S.

Light-side construction companies face more uncertainty but offer valuation upside if housing demand rebounds, they add.

BofA is positive on Heidelberg Materials, Buzzi, CRH, Saint-Gobain, Kingspan, Ferguson, Balfour Beatty and Travis Perkins.

For a Reuters story on the sector: European construction stocks face reality check after record run

(Danilo Masoni)

*****

EARLIER ON LIVE MARKETS:

EUROPEAN MEDIA: FEAR VS. FUNDAMENTALS CLICK HERE

DEFENCE STOCKS HAVE 'MORE ROUNDS TO FIRE' - BERENBERG CLICK HERE

MARKETS ON EDGE AS FED-TRUMP ROW RATCHETS UP A NOTCH CLICK HERE

EUROPE BEFORE THE BELL: AN UNSETTLED START AS TRUMP-POWELL RIFT ESCALATES CLICK HERE

POWELL'S PUNCH BACK JOLTS MARKETS CLICK HERE