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Construction giant Kingspan swings from worst to best stock as recession risk retreats


Kingspan CEO Gene Murtagh. Photo: Naoise Culhane

Kingspan CEO Gene Murtagh. Photo: Naoise Culhane

Kingspan CEO Gene Murtagh. Photo: Naoise Culhane

Kingspan has swung from being last year’s worst performing share on the Iseq 20 index of the main Irish stocks to this year’s best.

So far this year shares in the Cavan-based insulated panels maker for the construction industry are up 28.15pc at €64.82 each. 

The rebound is not enough to fully recover from last year’s huge drop when Kingspan lost about 52pc of its value, roughly €9bn, amid fears the inflation squeeze and rising risk of recession would hit the business.

But, the rise in Kingspan’s share price over the past five weeks is double the recovery on the wider Iseq 20 index of leading Irish shares. 

Davy Stockbroker’s analysts Florence O'Donoghue said the market view on Kingspan’s sector rather than company-specific news is driving the rebound in shares. 

"The recovery is in line, if a bit ahead of, Kingspan’s international peers including Rockwool in Denmark, where the shares are up 24pc, as there is more confidence around the outlook for the sector and the economy,” he said.

"The absence of bad news” in a context where many observers had feared the risk of recession and potentially a harsh downturn has boosted the sector, he said.

Having been more beaten up last year, Kingspan, whose CEO is Gene Murtagh, now appears to be rebounding more strongly from a low base. 

Kingspan’s insulated construction panels are used globally in the construction of buildings that increasingly are being designed to minimise heating and cooling requirements in line with higher environmental standards and pressure to cut long-term running costs.

Construction is typically among the sectors worst hit in a general recession. Increasing confidence that a global contraction is not now on the cards has lifted shares generally since the start of the year. 

The Iseq 20, which suffered an overall drop in 2022, is up just over 15pc since the start of the year. In London the FTSE 100 index of shares recovered to its record high yesterday for the first time since 2018.

While the more domestically focused FTSE 250 index is down on signs the British economy is lagging a wider recovery, the FTSE 100 is made up of bigger, global, businesses that make the bulk of their sales outside Britain.

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