JPMorgan Forecasts 15% Average Upside for US Construction Materials Stocks

JPMorgan expects US construction materials stocks to gain 15% on average, citing improved demand trends in H2 2025 and 2026. The sector has already risen 15% YTD, outperforming the S&P 500. Infrastructure and non-residential spending are supporting demand, with green shoots appearing in manufacturing and multi-family. Preferred names include CRH, Cemex, Vulcan Materials, Martin Marietta Materials, and Eagle Materials.

JPMorgan expects US construction materials stocks to deliver further gains, with an average upside of 15% by December 2026. The bank's outlook is based on improving demand trends in the second half of 2025 and into 2026. The sector has already risen 15% year-to-date, outpacing the S&P 500's 10% increase. Key drivers include infrastructure and non-residential spending, with green shoots appearing in manufacturing and multi-family sectors.

JPMorgan points to multiple tailwinds supporting demand, particularly in Aggregates, which exceeded initial expectations in the first half. The bank's preferred names include CRH, Cemex, Vulcan Materials, Martin Marietta Materials, and Eagle Materials. While the sector is trading at peak multiples, JPMorgan acknowledges some caution around recession risks but notes that infrastructure demand should remain resilient.

The construction materials sector has seen robust performance between mid-April and mid-July, reflecting expectations for better demand in the second half of the year. JPMorgan believes the second quarter was likely the trough of softer demand trends, with easier comparisons regarding weather in the second half.

[1] https://finance.yahoo.com/news/jpmorgan-sees-15-average-upside-135709973.html