AI is a game of kings, and OpenAI knows it
Investing.com -- Barclays initiated coverage on Amrize (SIX:AMRZ) with an “equal weight” rating and a price target of CHF41 per share, citing a mix of sector-specific challenges that support a valuation discount to peers.
“Various market challenges (cement pricing/import risk, Canadian aggs exposure and roofing supply additions) justify the valuation discount to peers. Strong mgmt team + M&A could drive upside to MT targets,” Barclays said.
Sentiment toward US construction markets has softened despite early signs of a non-residential rebound, contributing to pressure on Amrize shares since the spin-off.
Cement remains a major focus for Barclays, representing about 50% of Amrize’s group EBITDA. “This is a tricky part of the cycle,” the brokerage noted, with demand indicators mixed and import arbitrage at record levels despite tariffs.
Average domestic shipments now cost roughly double landed volumes, and 37% of Amrize’s cement sites operate in import-exposed markets.
Barclays’ long-term analysis shows cement and aggregate prices grow similarly (~4% annually) but with far greater volatility in cement, recording 13 down years since 1971 compared with three for aggregates.
This creates a potential pricing risk heading into 2026, especially as raw material and fixed cost inflation remain elevated.
Aggregates account for roughly 18% of Amrize’s EBITDA, but Barclays flagged significant geographic exposure, with about half of aggregate volumes sourced from Canada.
“We run a deep dive into LT Canadian aggs pricing and infrastructure drivers; we find pricing is lower and more volatile than the US, and demand indicators are also slowing with less obvious infrastructure-fuelled growth into 2026,” the brokerage said.
Infrastructure-fueled growth in Canada looks less clear through 2026. Barclays concluded that while Amrize’s US aggregate operations are solid, they are not as well positioned as peers such as VMC, MLM, and CRH, warranting a multiple discount.
In roofing, Barclays sees potential but also headwinds. Integration of Elevate, DuroLast, and Malarkey could support growth, particularly in flat single-ply commercial roofing.
However, they warned that about 6.5% roofing supply growth from 2025-28 could lead to more balanced supply and demand. Short-term headwinds for the repair and reroof (R&R) market, which makes up about 70% of roofing sales, also remain a concern.
Despite these challenges, Barclays highlighted upside potential. “ There is operational leverage to AMRZ if/when a US volume rebound comes, especially into non-resi,” the brokeage said.
Dodge Momentum improved in the third quarter, though Barclays described this as more a catch-up than a clear trend.
They also pointed to Amrize’s under-levered balance sheet (1.17x ND/EBITDA vs. a target of <1.5x), which could support inorganic growth and help close the gap in medium-term earnings targets versus CRH . Index inclusion was also flagged as a potential catalyst given shifting liquidity to the US.
Barclays’ sum-of-the-parts valuation applies a 2x discount to peers in cement and aggregates and a 9.3x multiple for envelope, resulting in a group valuation of 10.2x FY26E EBITDA and a 6.4% free cash flow yield, compared with CRH at 11.4x FY26E EBITDA and a 2.8% FCF yield.