Materials

Report by MYST Advisors

SRC was one of the stocks highlighted at MYST’s Top Post-Election Ideas Forum - Trump’s victory is expected to accelerate a potential resolution of the war in Ukraine and the recent closure of SRC’s acquisition of CRH’s Polish lime operations positions the company as a “stealth beneficiary” of reconstruction efforts. The stock trades at just ~5x FY25 EBITDA with a ~13% FCF Yield, a substantial discount to US peers including Martin Marietta, Vulcan Materials and Summit Materials. Notably, SRC's closest comp by size, US Lime & Minerals, trades at ~28x EBITDA. Presenter’s 2-year TP is £1.54 (95% upside), but he sees potential for a 3-to-4-bagger over time.

Report by Thompson Research Group

2H22 and 2023 will be a strong period for non-res construction and maintenance spending activity - backlogs / pipelines are sizable and increasing at a solid rate (and comes before the infrastructure bill which has yet to hit the ground in a material way). In keeping with trends over the past 18 months, data centres, warehouses and healthcare are very strong. Although labour and material challenges remain, TRG expects bullish results from several stocks including WillScot Mobile Mini, Herc, Vulcan Materials and Beacon Roofing.

Report by Thompson Research Group

TRG’s survey focuses on aggregate, concrete, asphalt and cement volume and pricing trends throughout the quarter. During this survey season, they have been particularly focused on the relative changes in momentum, especially for the residential end market. Pricing is going through while volumes and margins are a mixed bag. TRG’s 25-page report also includes earnings previews and estimate changes for Arcosa, Atlas Technical Consultants, Eagle Materials, Martin Marietta Materials, Summit Materials and Vulcan Materials.