Goldman Sachs names top EU construction stocks amid market headwinds

Goldman Sachs has identified four European construction stocks as preferred picks in the sector, emphasizing companies with pricing power and exposure to infrastructure projects over residential markets.

The bank favours stocks with limited exposure to residential markets and strong pricing power, as higher bond yields threaten to delay a housing recovery while infrastructure and non-residential construction provide more resilient sources of demand.

1. Sika AG (SIX:SIKA) - The Swiss maker of construction chemicals and specialty materials tops Goldman Sachs' list as a preferred pick. The bank cites the company's pricing power and exposure to non-residential construction and infrastructure, which are holding up better than residential markets.

2. Holcim AG (SIX:HOLN) - The Swiss cement and building materials group ranks second among Goldman Sachs' favored stocks. The bank points to Holcim's exposure to infrastructure and other relatively resilient construction segments, alongside its ability to defend pricing amid subdued demand.

3. Heidelberg Materials AG (ETR:HEIG) - The German cement and aggregates producer is among the bank's preferred stocks. Goldman Sachs notes that infrastructure demand and pricing resilience offer support for Heidelberg Materials while the residential recovery remains delayed.

4. Rockwool AS (CSE:ROCKa) - The Danish insulation manufacturer rounds out Goldman Sachs' list of preferred picks. The bank's selection reflects its preference for businesses with pricing power and less reliance on a near-term housing rebound.