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On Tuesday, Bernstein SocGen Group initiated coverage on CRH plc (NYSE:CRH), a leading materials company with a market capitalization of $66.92 billion, with an Outperform rating and a price target of $115. The firm’s analysis points to CRH’s dominant position in the North American aggregates and asphalt market, which is integral to road-building, as a key advantage. InvestingPro data shows the company has achieved strong returns, with a 21.66% price return over the past year.
CRH’s significant involvement in US infrastructure projects is seen as a protective buffer in the current volatile economic climate. With annual revenue of $35.8 billion and a solid financial health score rated as GOOD by InvestingPro, the company’s infrastructure engagement is expected to benefit from the Infrastructure Investment and Jobs Act (IIJA) and other government spending, such as the Department of Transport (DoT) budgets. These types of government expenditures are generally considered to be more resistant to geopolitical tensions and economic downturns, as they are often used by administrations to sustain the economy.
Despite the political changes and potential policy shifts, the IIJA funds have remained untouched, which suggests a stable source of income for companies involved in infrastructure. The continuity of these funds was noted as not even being challenged by former President Trump, indicating bipartisan support for infrastructure funding. Trading at a P/E ratio of 20.78, CRH maintains a strong market position with analyst targets ranging from $87.50 to $130.50.
The CEO of CRH, during a recent earnings call, emphasized that only a third of the IIJA funds have been utilized, which presents considerable opportunities for expansion in the coming 3-4 years. This statement underlines the company’s growth prospects and the potential for increased activity in the infrastructure sector.
CRH’s stock rating and price target reflect Bernstein’s positive outlook on the company’s future performance, largely due to its strategic position in the North American market and the expected continued government investment in infrastructure.
In other recent news, CRH reported a first-quarter net loss of $98 million, or $0.15 per share, which was wider than analysts’ expectations for a loss of $0.08 per share. The company’s revenue increased by 3% to $6.8 billion, aligning closely with estimates of $6.81 billion. Despite the loss, CRH reaffirmed its full-year 2025 guidance, projecting net income between $3.7 billion and $4.1 billion and adjusted EBITDA of $7.3 billion to $7.7 billion. The company completed eight acquisitions worth $0.6 billion and continued its share buyback program, repurchasing $0.5 billion in shares. Additionally, CRH declared a quarterly dividend of $0.37 per share, marking a 6% increase from the previous year. CEO Jim Mintern highlighted the strength of their strategy and commercial management as key factors in their performance. In other developments, Mintern noted that the U.S. residential construction market recovery might be delayed due to high interest rates and inflation. He indicated that the recovery, initially expected by 2025, could be pushed to 2026 or later.
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