Top Building Materials Stocks to Watch

Investing.com -- Building materials stocks are positioned for varying performance as interest rate cuts approach, with early-cycle beneficiaries taking the lead according to Wells Fargo analysis. The firm has launched coverage of the sector with clear preferences for companies poised to benefit from anticipated monetary policy shifts.

Amrize stands out as the top pick, with analysts highlighting its cement, wallboard, and home improvement focus. As a relatively new entrant to the U.S. market, Wells Fargo sees potential for upward revaluation as the company demonstrates sustainable free cash flow yields and EBITDA margins. Analysts believe AMRZ could benefit from greater market recognition as it potentially gets added to major indices, creating additional investor interest.

Eagle Materials is well-positioned to benefit from the early-cycle recovery expected as interest rates decline.

In a recent development, eXp World Holdings reported second-quarter 2025 earnings per share of -$0.01, missing analyst forecasts, while revenue of $1.3 billion met expectations. The company also announced the launch of a commercial real estate division in the United Kingdom.

CRH could recover earlier than other construction segments. While homebuilding demand has been weak with construction spending down 4.4% year-to-date compared to last year, Wells Fargo notes that housing and home improvement typically respond more quickly to rate cuts than other construction categories.

CRH reported second-quarter adjusted EBITDA of $2.463 billion, which exceeded consensus estimates, and reaffirmed its full-year 2025 earnings forecast. The company is also reportedly in advanced discussions to acquire Eco Material Technologies for $2.1 billion.

The broader outlook for construction remains cautious through 2026, with recovery anticipated in late 2026 and into 2027. Interest rates are identified as a key driver for private construction activity, with analysts expecting a typical 12-18 month lag between lower interest rates and improved construction metrics.

Pricing power remains a significant factor across the sector. Wells Fargo projects aggregates prices to rise 5-6% in 2026, continuing a mid-single-digit trend. Cement prices are expected to increase by 3% year-over-year in 2026, rebounding from flat performance in 2025, supported by supply constraints once demand recovers.

Martin Marietta Materials received all necessary regulatory approvals for its asset exchange with Quikrete Holdings and also announced a 5 percent increase in its quarterly cash dividend. Following its second-quarter results, the company received price target increases from several firms, including Stifel and Jefferies.

Vulcan Materials Company reported second-quarter 2025 earnings per share of $2.45 and revenue of $2.1 billion, both of which fell short of analyst forecasts. Separately, Fitch Ratings upgraded the company’s Long-Term Issuer Default Rating to ’BBB+’ from ’BBB’, citing strong margins and financial flexibility.

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