GB : SIG PLC - Recovery stock recovering

We upgrade EPS estimates for SIG by 8-12% in 2022E and 2023E due to the momentum in margin improvement that was evident in the 2021 results, and higher selling prices carried forward. The new strategy of recovering margin by restoring lost market share is working, fuelled by investment in sales and operational personnel. It has momentum in market share and gross margins, with operating costs controlled. Its valuation could double if margins hit the 5% target, and we see over 60% upside if the shares move to discount the 2023E target of 3%. The market may also start to value structural growth in its insulation businesses.