Gold prices near 3-week lows as stronger dollar, trade progress weigh
Investing.com - Morgan Stanley (NYSE:MS) upgraded Holcim Ltd (SIX:HOLN) from Equalweight to Overweight on Tuesday, while adjusting its price target to CHF55.00 from CHF97.00.
The Swiss building materials company trades at 8% free cash flow yield for fiscal year 2026 estimates and 7.4x EV/EBITDA, according to Morgan Stanley’s analysis, comparable to European heavyside building material peers and its closest competitor Heidelberg (ETR:HDDG).
Morgan Stanley noted that Holcim shares currently trade at a significant discount to Swiss Materials and Industrial peers, which average 4% free cash flow yield and 18x EV/EBITDA, a gap the firm believes should narrow given Holcim’s steady cash generation growth and prudent capital allocation.
The investment bank sees more than 50% upside potential in its bull case scenario, which would put the stock at 5% free cash flow yield, supported by the company’s Swiss domicile and consistent free cash flow growth.
Morgan Stanley also highlighted potential earnings upside through mergers and acquisitions, as management has balance sheet flexibility with free cash flow not allocated to capital expenditures, base case M&A, or cash returns, estimated at 22% of Holcim’s current market capitalization.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.