Truce in Iran boosts construction stocks. Buzzi flies in Milan

(Il Sole 24 Ore Radiocor)- The truce between the US and Iran and hopes for reconstruction in the Middle East are giving wings to stocks in the Construction & Material sector (European sub-index +5.77%). Thus, Frankfurt's Heidelberg Cement was up solidly, while Holcim Ag was also up in Zurich and Milan's Buzzi Unicem leads the rises on a FTSE MIB almost completely in the positive and is back near pre-fight levels.

What relieves the sector, according to operators, are the prospects of the realisation of new works in the Middle East and the resumption of those interrupted by the war. On the one hand, Iran, thanks to the truce, could start the reconstruction process of buildings damaged by Israeli and American bombing. On the other hand, the interruption of hostilities could make it easier to resume work on the pharaonic construction sites in the Gulf countries. In addition, write analysts at Teikoku Databank, the resumption of shipping in the Strait of Hormuz and the easing of tension in the energy markets (with oil plummeting today) offers relief to companies that 'have seen prices of a wide range of items soar', such as building materials.

In short, the overall picture for the Constructions sector looks positive and in 2026 can sustain Buzzi's performance. Indeed, although the company "expects a marginal decline in Ebitda on an annual basis", it should continue to have "solid profitability" writes Citi. For the analysts - who have lowered the target price on the stock from EUR 55 to EUR 50, maintaining the 'neutral' rating - the US market could present some criticalities, 'with declining volumes and limited price flexibility (Texas)'. At the same time, however, 'Italia should maintain its 2025 performance, supported by European infrastructure funding'. Citi also sees 'a gradual recovery' in Germany, 'driven by federal infrastructure programmes and improving prices from a low base', while 'Eastern Europe (Poland and the Czech Republic) is set to maintain its positive momentum'. Outside the Old Continent, the easing of monetary policy, 'which will unblock postponed construction projects', should fuel Buzzi's positive trajectory in Brazil. Finally, in the United Arab Emirates, although regional conflicts have so far 'blocked cement consumption', the outlook could improve after the truce. In addition, according to experts, the company has 'internal initiatives' aimed at 'preserving Ebitda' in the area.