Heidelberg Materials stock upgraded to Buy at UBS on carbon pricing benefits

Published 14/10/2025, 06:52
Heidelberg Materials stock upgraded to Buy at UBS on carbon pricing benefits

Investing.com - UBS upgraded Heidelberg Materials AG (ETR:HEI) (OTC:HDELY) from Neutral to Buy on Tuesday, raising its price target to EUR230.00 from EUR188.00.

The Swiss bank cited the upcoming European cement industry changes in 2026, when CO2 allowances will be removed for the first time, potentially triggering mid-single-digit percentage price increases across the sector as producers pass through carbon costs.

UBS believes Heidelberg Materials is particularly well-positioned for this transition, noting the company has already completed significant decarbonization investments, which should result in lower cost pressures compared to competitors.

The investment bank forecasts Heidelberg’s return on invested capital (ROIC) will expand to approximately 12% by 2030, reaching record levels as price-led operational strategy growth combines with footprint optimization.

UBS’s earnings per share estimates for 2026-2027 stand approximately 3% above consensus, with expectations for double-digit percentage shareholder returns in coming years, which the bank argues are not adequately reflected in the current enterprise value to EBITDA multiple of around 8x.

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