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Investing.com -- JPMorgan expects U.S. construction materials stocks to deliver further gains, citing improving demand trends in the second half of 2025 and into 2026.
The bank has established December 2026 price targets and said it sees “a 15% average upside for our OW rated stocks among pure US plays, 20% for those that also have exposure outside of the U.S. and 7% for our N rated stocks.”
The sector is already up 15% year-to-date, outpacing the S&P 500’s 10% rise, following strong performance between mid-April and mid-July.
JPMorgan said this reflected “expectations for 2H to be better on vols and likely even on prices, especially for Aggs, while expectations for interest rate cuts beginning in September has revived the possibility of a turnaround in residential and non-res spending ahead.”
While the sector is trading at peak multiples, the bank pointed to multiple tailwinds supporting demand, particularly in Aggregates, which exceeded initial expectations in the first half.
The analysts note that infrastructure and heavy non-residential spending continue to underpin activity, with “green shoots appearing in manufacturing and multi-family.”
JPMorgan added: “With guidance for most companies pointing to improved vols in 2H, we believe 2Q was likely the trough of softer demand trends. Plus, comps could be easier regarding weather in 2H.”
JPMorgan acknowledged some caution around recession risks, but noted that Aggregates are “not as cyclical” and that infrastructure demand should remain resilient.
The bank’s preferred names include CRH and Cemex, followed by Vulcan Materials, Martin Marietta Materials, and Eagle Materials.