Saint-Gobain's Stock Underperformance: A Divergent 2025 from the CAC 40

Two Major Shocks That Shaped the Year

The most notable phase occurred in mid-April when the stock dropped nearly 11% in just three days, following a swift appreciation of more than 12%. The market faced concentrated profit-taking, likely linked to expectations of mixed quarterly results. The stock was the biggest decliner on the CAC 40 on April 17, affected by a slowdown in North American volumes and an uncertain US real estate environment, despite record margins in the first half of the year. Investors reacted negatively to the management's cautious outlook on new construction prospects, leading to a retreat towards technical support around €91.

In late July to early August, the stock underwent another correction of 10% over three days, with Saint-Gobain among the biggest decliners on the CAC 40 amid a widespread retreat in the Paris market. After unsuccessfully testing €104, the stock fell back to €91 in mid-August due to uncertainties in the US real estate market and moderate revenue growth despite strong operating margins (11.4%). First half results (+3.4% revenue growth) were overshadowed by high tax expenses and limited visibility outside Europe. These two episodes largely explained the significant disconnect between the stock and the Paris index for the year. Between these lows, the stock alternated between recovery and consolidation phases, without managing to regain the momentum of the CAC 40.

Volumes Decline Despite Record Margins in the First Half

The third quarter 2025 revenue increased by 1.3% in local currencies, reaching €11.42 billion. However, the group experienced a 1.3% decline in real terms due to the depreciation of most currencies against the euro, particularly in the Americas. Over nine months, the cumulative revenue amounts to €35.276 billion, down 1.3% year-on-year. This apparent weakness, however, obscures operational resilience: the group achieved a record operating margin of 11.8% in the first half of the year. The group is targeting an operating margin above 11.0% in 2025, demonstrating its ability to maintain profitability in a challenging environment. There are no surprises in the guidance: Saint-Gobain stays the course without announcing any upward revisions or declines, in a context where each quarter is crucial to meet the stated objective.

Growth Areas and Pressured Markets: Geographic Contrasts

North America saw a decline of 6.5%, impacted by high interest rates and a sluggish new construction market, while Latin America surged by 12.8%, notably boosted by the integration of Cemix. In the Asia-Pacific region, growth reached 8.4%, driven by India and Southeast Asia.
On the opportunities front, the rollout of the « Lead & Grow » strategic plan and the dynamics of construction chemicals offer structural growth drivers. However, risks remain: geopolitical tensions, currency volatility, and reliance on the successful integration of acquisitions.
Looking ahead to 2026, analyst consensus is evenly split between « buy » and « market perform, » setting an average target of 117.5 euros. This indicates a potential 35% increase compared to the year-end price. This gap reflects both the appetite for Saint-Gobain's regionalized model and ongoing uncertainties about the strength of the recovery in Europe and North America. If the company can maintain its margins while normalizing organic growth, 2026 could mark a resurgence for the stock. However, investors will wait for concrete signals, quarter by quarter, before readjusting their positions.