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On Wednesday, Citi analyst Ephrem Ravi adjusted the price target for Heidelberg (ETR:HDDG) Materials AG (HEI:GR) (OTC: HDELY), increasing it from €125.00 to €135.00, while maintaining a Neutral rating on the stock. This revision reflects a positive outlook on the company’s financial performance, particularly noting the fourth quarter of 2024.
Heidelberg Materials reported a revenue of €5,306 million in the fourth quarter, marking a 4.2% year-over-year increase and a 0.4% like-for-like (LFL) growth. EBITDA for the same period was €1,175 million, representing an 8.8% increase year-over-year and a 5.6% LFL improvement.
The analyst highlighted that during the quarter, Heidelberg Materials experienced continued growth in Eastern Europe and saw improvements in the Nordic region. These gains helped to balance the persistently challenging markets in France and the United Kingdom (TADAWUL:4280), while the German market showed signs of stabilization, albeit at a low level.
In the Americas, the company benefited from healthy underlying demand that supported volume growth without any significant impact from weather events. Emerging markets (EM) saw volume improvements, although pricing pressures persisted. In the Asia-Pacific (APAC) region, volume gains in Indonesia and Australia compensated for weaker performance in India, where pricing remained sluggish.
The situation in Africa and the Mediterranean (Med) region was mixed, with most markets expected to show sequential improvements. However, Egypt continued to struggle with weak volume, and currency fluctuations (FX) overshadowed pricing.
The analyst also pointed out that margins are likely to be bolstered by resilient pricing in developed markets (DMs), some volume improvements, and the ongoing benefits from the new Mitchell Plant in the United States. The revised price target to €135 reflects these factors and the overall expectation of continued steady performance by Heidelberg Materials.
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