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Investing.com - UBS upgraded Holcim Ltd (SIX:HOLN) from Neutral to Buy and raised its price target to CHF78.00 from CHF60.00, citing the company’s positioning ahead of expected changes in the European cement market.
The Swiss bank believes 2026 will mark the beginning of a "new European cement regime," with Holcim well-positioned as the purest sector play on this theme due to its 55-60% direct earnings exposure to Europe.
UBS notes that consensus estimates undervalue both the structural support to cement pricing and the returns that decarbonization leaders like Holcim will see next year, with the firm’s European segment EBIT forecast running 8% ahead of consensus.
The upgrade highlights Holcim’s high-single-digit earnings growth potential driven by operational execution regardless of sluggish market conditions, with return on invested capital (ROIC) already double compared to 2015-17 levels and projected to rise another approximately 300 basis points by 2030.
UBS sees Holcim offering low double-digit percentage total shareholder returns, with the current share price providing an attractive entry point following the deflation of "German infrastructure hype" and market adjustment to softer near-term demand.
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