Saint-Gobain Offsets Surging Inflation During First Half; Profit Guidance Unchanged

No-moat Saint-Gobain raised prices on its building materials by 15% during the first half of 2022, which offset the impact of energy and raw material inflation to deliver record first-half results. Approximately 80% of the group's energy bill is hedged for 2022 so price increases have significantly boosted the bottom line, which helped Saint-Gobain achieve a positive price-over-cost spread and like-for-like profit growth of 11%, at a record EBIT margin of 11%. While the company expects raw material and energy inflation to increase by EUR 3 billion (above their initial expectations of EUR 2.5 billion), most notably due to rising gas prices, management is confident its pricing actions will protect profitability and have not changed profit guidance. Our forecasts remain mostly unchanged, and we maintain our EUR 58 fair value estimate. Shares appear undervalued