RBC Capital Markets upgraded Saint-Gobain on Tuesday, moving the stock from a "sector perform" to an "outperform" recommendation and assigning a 12-month price target of €95. That target implies about 23% upside from the current share price of €77.36.
The shares have weakened since the brokerage first began covering the stock in June 2025 with a "sector perform" rating, sliding roughly 23% from the near-€101 levels at initiation.
RBC's rationale
RBC said its upgrade rests on three core factors. First, the firm believes Saint-Gobain has more pricing power than the market currently appreciates, with price increases implemented across all regions and the effect expected to accumulate through the year. Second, the outlook for the U.S. roofing division has improved. Third, the company has balance sheet capacity that, if deployed up to its self-imposed leverage ceiling, could support more than $6 billion of acquisitions.
Management told investors on the company's first-quarter 2026 earnings call that price rises have been introduced in every geography and that the benefit should build over time. Management said, "In all geographies we have pushed prices up... It will materialize progressively in Q2 and full speed in H2." In the U.S. roofing segment, the company has announced an additional price increase of up to 10% effective in June.
RBC contrasts these moves with market expectations: consensus currently assumes price growth of just 1.3% in 2026 and 1% in 2027, while realized price increases were 6.7%, 14.6% and 4.6% in 2021, 2022 and 2023 respectively.
Profitability and volumes
On the earnings front, RBC forecasts group EBIT of €5.43 billion for 2026, about 3% higher than the consensus estimate of €5.27 billion. The brokerage expects the gap versus consensus to widen to 3.7% by 2028.
RBC singled out the Americas division as a material source of downside pressure on recent upgrades to EBIT forecasts. The region accounted for 43% of forecast EBIT downgrades over the past year, largely driven by weaker roofing volumes. CertainTeed's volumes fell 17% year-on-year in the fourth quarter of 2025 and 18% in the third quarter of that year, according to the brokerage's note.
RBC added that easier year-on-year comparisons in the second half of 2026 should help volumes recover. The broker also highlighted pricing moves among competitors, noting that Owens Corning, Malarkey Roofing Products and Atlas Roofing Corporation have announced mid-2026 price increases in the 5% to 10% range.
Valuation, balance sheet and capital deployment
Saint-Gobain currently trades at an estimated 6.6 times 2026 EV/EBITDA, which RBC says represents a 41% discount to European peers. That discount compares with a 10-year average discount of 38.7%.
RBC's price target is derived from a discounted cash flow framework that implies a multiple of 7.8 times 2026 EV/EBITDA. The DCF uses a weighted average cost of capital of 11.0% and a terminal growth rate of 2.5%.
A sum-of-the-parts look suggests the group's EMEA and Asia-Pacific businesses are priced at around 2.4 times EV/EBITDA today, versus roughly 5 times implied by the €95 target.
Net debt to EBITDA is estimated at 1.3 times for 2026. RBC noted that if leverage were increased to the company’s self-imposed ceiling of 2 times net debt to EBITDA, it would free up more than $6 billion for acquisitions, providing significant M&A optionality.
Strategic targets and shareholder returns
Saint-Gobain's "Lead and Grow" strategy sets an objective of EBITDA margins between 15% and 18% by 2030. By comparison, consensus expectations sit at 15.5% for 2025.
RBC projects earnings per share of €6.32 in 2026, €7.03 in 2027 and €7.64 in 2028. Dividend forecasts in the note are €2.40 for 2026, €2.55 for 2027 and €2.70 for 2028, which imply a dividend yield rising from 3.1% to 3.5% over that period.
Scenario analysis
RBC included downside and upside valuation cases. In the downside scenario, a 5 times EV/EBITDA multiple would value the shares at €55. In an upside scenario using an 11 times multiple, the stock would be valued at €146.
The brokerage's note and associated valuation assumptions are central to its upgrade, which leans on both near-term price implementation and the company's capacity to pursue strategic acquisitions should management elect to increase leverage within stated limits.
Note on tools referenced in the original research: the brokerage's commentary included reference to valuation models and fairness metrics used to contextualize the upgrade.