French building materials producer and distributor Compagnie de Saint-Gobain (Saint-Gobain) is benefiting from strong dynamics in its core markets for renovation and construction, having reported record 2021 results. We believe the favorable momentum and underlying market trends will continue to boost profits and metrics may still exceed current thresholds despite higher potential investments and shareholder returns. We therefore revised the outlook on Saint-Gobain to positive from stable and affirmed the 'BBB' long-term issuer credit rating. The positive outlook reflects a one-in-three likelihood of an upgrade within the next 12 months if we believe Saint-Gobain will maintain adjusted funds from operations (FFO) to debt above 30%, despite the inflationary cost environment. The positive outlook reflects a one-in-three likelihood of an upgrade
