Saint-Gobain faces risks from interest rates and political uncertainty

RBC Capital analysts have warned that Saint-Gobain could face challenges due to rising interest rates and political uncertainties. The bank anticipates a deceleration in the company's American operations by 2027, forecasting a 3% volume decrease in the Americas for the fourth quarter and a 1% decline for the 2027 fiscal year.

Economic pressures, including high interest rates and low consumer confidence, are expected to dampen the outlook for new construction and residential renovation spending in the United States. Additionally, rising rates may impact construction starts in Europe, while political uncertainty surrounding the 2027 French presidential election could further restrain spending in France. Consequently, RBC has lowered its recommendation for the building materials manufacturer from ‘outperform’ to ‘sector perform’ and reduced its price target from 97 to 80 euros.