Buzzi Unicem (BZU) reported a strong H1 with results well ahead of expectations. Unfortunately, those results coincided with the markets falling out of bed and the stock finished down on the day when it should have been up 5%-plus. It has been playing catch-up since and has further to go in our view. Despite management’s cautious guidance, the price-cost spread should continue to benefit the group in H2. Meanwhile, debt reduction continues to be impressive despite recent deals and the impact of IFRS16. This leaves the group well placed to pursue further deals or possibly to adjust the capital structure and step-up returns to shareholders. We upgrade our forecasts (4%) and reiterate our ‘Outperform’ rating.
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