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Investing.com - JPMorgan has assumed coverage on CRH plc (NYSE:CRH) with an Overweight rating and raised the price target to $130.00 from $117.00. The stock, currently trading near its 52-week high of $113.95, has delivered impressive returns with a 22.72% gain year-to-date.
The firm notes that CRH maintains operations across North America, which accounts for 75% of EBITDA, as well as Europe and Australia, providing geographical and end-market diversification across essential materials, road solutions, and outdoor living products. With a market capitalization of $75.17 billion and annual revenue of $36.35 billion, CRH has established itself as a prominent player in the construction materials industry.
JPMorgan projects EBITDA growth of 10% for fiscal year 2025 and 6% for fiscal year 2026, slightly above the consensus estimates of 9% and 6%, respectively.
The investment bank highlights CRH’s proven track record of acquisitions, organic growth prospects, and strong cash flow generation as factors making it an attractive investment opportunity.
JPMorgan observes that CRH trades at 11.1x forward EV/EBITDA, a discount compared to peers with similar EBITDA growth and free cash flow conversion profiles, suggesting potential for stock re-rating driven by possible S&P 500 inclusion, accretive M&A transactions, and ongoing share repurchases.
In other recent news, CRH has reported significant developments that investors may find noteworthy. The company successfully achieved earnings per share growth of 3% and EBITDA growth of 9%, despite challenging conditions in the materials sector. Additionally, CRH has signed an agreement to acquire Eco Material Technologies for $2.1 billion, with the transaction expected to close in 2025, pending regulatory approval. This acquisition will be funded with cash on hand, and CRH does not anticipate any changes to its credit ratings.
Furthermore, CRH completed a $0.3 billion share buyback and announced a new program to repurchase up to another $0.3 billion worth of shares, effective until November 2025. In terms of stock ratings, DA Davidson downgraded CRH from Buy to Neutral, citing a slower growth outlook, while setting a price target of $105. Conversely, Morgan Stanley raised its price target for CRH to $110, maintaining an Overweight rating, driven by anticipated EBITDA growth and favorable currency conditions. These updates reflect a mixed sentiment from analysts regarding CRH’s future performance.
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