A great first half for Saint-Gobain, stock trading strategy

Saint-Gobain is a world leader that generates 73% of its turnover internationally, which designs, manufactures and distributes building materials. The group has 800 production sites and employs more than 167,000 people under the motto “making the world a better home”.

During the presentation of the results on July 27, Saint-Gobain had an exceptional first half. Turnover grew by 15.1% in one year. In final data, it reached a new record of 25.48 billion euros, above the 25.2 billion estimated by analysts. Operating profit increased by 17.5% to 2.79 billion, with a margin of 11%. The gross operating margin (Ebitda) increased by 13.4%, reaching a record level of 3.68 billion euros. Net profit increased 32.8% to 1.72 billion.

This good performance reflects the measures taken as part of the “Grow & Impact” plan and the good momentum of all segments of the group, which all recorded double-digit organic growth, driven in particular by renewal in Europe and construction in the Americas and Asia.

In the current context, with accelerating inflation, Saint-Gobain expects an increase in energy and commodity costs of almost 3 billion euros in 2022 compared to 2021. This inflation affects both commodities, transport that the cost of energy, especially in Europe.

However, Benoit Bazin, CEO of Saint-Gobain, is confident in the future and said: ” In the coming quarters we are ready to adapt with agility to the consequences of the increase in interest rates, inflation and the geopolitical and energy situation in Europe and, despite this context, I am confident in the prospects for 2022, which points to further operating profit growth in 2022 compared to 2021 at comparable exchange rates “.

From its peak reached on 12 January 2022 at € 67.12, Saint Gobain stock has declined within a medium-term downtrend channel.

The bottom of the descending channel will result in a 26.4% rebound on March 7, 2022 between € 45.76 and € 57.87.

A new rebound attempt has been underway since 5 July, the target of which could be the upper part of the bearish channel, it stands at 51.56 euros, or a potential gain of 20.3%.

Given this situation, we therefore propose a downward purchase at the level of the 20-day moving average at € 42.84 with a target of € 51.56. We will put a stop loss order at € 40.35.

If successful, the gain would be 20.3% for a risk of loss of 5.8%.

Promotional recommendation.

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