Goldman Sachs initiates coverage on Amrize with “neutral” rating

Published 01/07/2025, 11:38
© Reuters

Investing.com -- Goldman Sachs has initiated coverage on Amrize (NYSE:AMRZ), a North American cement and roofing company, with a “neutral” rating and a 12-month price target of $57, representing 15% upside from the June 30 closing price of $49.55. 

The brokerage’s evaluation flags Amrize’s leading position in U.S. cement, balanced against near-term headwinds in construction demand.

Amrize holds a 23% share of the 104 million ton U.S. cement market, the highest among domestic producers, with over 50% local market share within a 150-mile radius of its plants. 

This geographic concentration provides pricing power in a sector where transport costs are high. 

Goldman estimates Amrize’s cement EBITDA margins at approximately 40%, underpinned by a logistics network that ships more than 60% of cement by rail and barge.

The company’s operational scale includes 18 cement plants (13 U.S., 5 Canada), 141 terminals, and 55 cementitious operations. 

Amrize’s Building Materials segment accounts for 71% of sales and 77% of EBITDA, while its Building Envelope business, developed through seven acquisitions since 2021, makes up 29% of sales and 23% of EBITDA. Building Envelope margins have expanded from 15% in 2021 to 23% in 2024.

Revenue is projected to rise modestly from $11.7 billion in 2024 to $12.9 billion by 2027. 

Earnings per share is expected to increase from $2.69 in 2024 to $3.60 in 2027. Free cash flow per share is forecast at $0.07 in 2025, rising to $3.92 in 2027. 

Amrize is targeting capital returns with $1.6 billion in planned share repurchases annually from 2026.

The U.S. cement industry remains in a structural net import position, with 24% of demand met by imports due to prohibitive domestic replacement costs ($800–$1,000 per ton). 

Amrize imports only a small portion of its cement, largely from Canada. The company is investing in capacity expansions, including a fifth mill at its St. Genevieve plant and a new clinker line in Quebec.

Despite these strengths, Goldman cites a deceleration in private non-residential construction as a limiting factor. 

Construction spending is expected to grow just 1% in 2025, down from 7% in 2024, driven by weaker trends in manufacturing, warehousing, and office space.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.