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On Monday, CFRA analyst Adrian Ng adjusted the price target for Heidelberg (ETR:HDDG) Materials AG (HEI:GR) (OTC: HDELY), increasing it from EUR120.00 to EUR150.00. Despite the higher price target, the analyst has decided to keep the stock’s rating at Hold. The new target is based on forward-looking financial metrics, suggesting a price-to-earnings (P/E) ratio of 11.1 times and an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 7.2 times, which are at the upper end of the company’s historical trading range.
Ng’s revised price target comes with an updated earnings per share (EPS) forecast for the year 2025, raised to EUR13.50 from the previous EUR12.50. This adjustment reflects an expectation that some purchases may be brought forward to 2025 in anticipation of a more volatile market environment in the latter part of that year and beyond. The analyst cites the company’s guidance for an EBIT between EUR3.1 billion and EUR3.3 billion in 2024, which could represent up to a 10% growth compared to the previous year.
Despite the potential for growth, the CFRA analysis suggests that the current share price may already reflect many of the short-term positive factors. With this in mind, the firm remains neutral on Heidelberg Materials stock. Ng notes that the primary catalyst for the construction sector’s recent growth, infrastructure construction, is expected to decelerate in the upcoming years.
Heidelberg Materials AG, a global building materials company, is navigating a dynamic market landscape. With the updated financial estimates and price target, investors are provided a glimpse into the company’s potential performance and the analyst’s perspective on its valuation. The Hold rating indicates a cautious approach, recognizing both the opportunities and challenges that lie ahead for the company.
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