Bank of America Identifies Top Investment Opportunities in Building Materials
Charlotte, Thursday, 3 September 2026.
Driven by robust earnings momentum and strong light-side product demand, Bank of America elevated key building materials stocks, offering resilient growth potential despite broader U.S. construction market headwinds.
Analyst Strategy and Earnings Momentum
Bank of America Securities has adopted a barbell strategy within the European and U.S. building materials sector, prioritizing equities with robust earnings momentum and undervalued metrics [1]. The brokerage identified specific top picks with price objectives set at €112, €120, and US$315, citing positive earnings trajectories and attractive valuations as key drivers [1]. Conversely, the firm remains cautious on entities facing escalating capital expenditure requirements and diminishing returns, including Sunbelt Rentals, which carries an underperform rating [1]. This selective approach highlights a divergence in sector performance, where light-side building products demonstrated stronger second-quarter results due to better-than-expected volumes and resilient pricing margins [1].
Construction Spending Context
This analyst optimism contrasts with recent broader construction data, as the U.S. Census Bureau reported a seasonally adjusted annual rate (SAAR) of $2,157.6 billion for July 2026, released on September 1, 2026 [2]. This figure represents a -0.466 decrease from the revised June 2026 estimate of $2,167.7 billion [2]. Year-over-year comparisons show total construction spending for July 2026 is -3.79 below the July 2025 estimate of $2,242.6 billion [2]. Private construction spending also declined 0.5% to $1,614.2 billion SAAR, with residential construction falling 1.3% to $859.0 billion, while nonresidential construction rose 0.4% to $755.2 billion [2].
Future Outlook and Catalysts
Looking toward the third quarter of 2026, analysts anticipate pockets of demand recovery in Europe, specifically within Eastern Europe, the Nordics, Spain, and Germany, though risks remain for volumes in France and the UK [1]. U.S. housing trends continue to appear muted, yet non-residential markets are maintaining stability despite the broader spending decline observed in Census data [1][2]. Key catalysts monitoring into year-end include U.S. infrastructure funding discussions, hurricane season impacts, 2027 pricing announcements, and the Bank of America Building Materials conference scheduled for September 29-30, 2026 [1].