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Investing.com -- J.P. Morgan on Wednesday downgraded Buzzi (BIT:BZU), the Italy-based cement and concrete producer, to “neutral” from “overweight,” saying the stock’s sharp 2025 rally, rising cost exposure and heavier capital requirements narrow the scope for further outperformance.
The brokerage lifted its price target to €58 from €54, reflecting the stock’s strong re-rating during the year. Buzzi last traded at €51.75 on Dec. 2, giving it a market capitalization of €11.57 billion.
J.P. Morgan said Buzzi was one of the strongest performers in the sector in 2025, rising 50% versus the European building-materials sector’s 20% increase. The company’s valuation also rerated by 90% during the year. The analysts wrote that the magnitude of the rally now limits upside, prompting the shift to a market-weight stance.
The analysts flagged that Buzzi still holds attractive geographic exposures. It has the highest exposure to Germany among heavyside names in the coverage, positioning the company to benefit from German government stimulus.
It also carries higher-relative U.S. exposure compared with European peers, which J.P. Morgan said it may allow the producer to participate in any pickup in U.S. construction activity.
However, the downgrade was driven by several headwinds. J.P. Morgan said Buzzi is lagging behind on decarbonization in Europe, and because of this, it may face greater cost pressure as expenses tied to the EU Emissions Trading System rise.
The analysts added that Buzzi’s capital-expenditure needs are likely to increase as it undertakes the modernization of its U.S. plants and pursues decarbonization actions in Europe.
The U.S. market also presents potential risks. According to the brokerage, parts of Buzzi’s footprint, including coastal regions, could see more pricing pressure because of the presence of independent import terminals.
J.P. Morgan also cited the possibility of a loss of volumes stemming from one of Buzzi’s largest customers acquiring a cement operator.
J.P. Morgan’s updated earnings model shows FY25 adjusted EPS rising slightly to €4.75 from €4.73 and FY26 adjusted EPS reduced to €5.03 from €5.19, reflecting modest changes in its forecasts following the report’s volume, pricing and cost updates.
Within the broker’s broader sector call, the heavyside sub-sector remains preferred for 2026, but Buzzi is identified as the only heavyside downgrade, with J.P. Morgan citing “less benefit” expected for the Italian producer next year relative to peers because of its cost structure, higher capex, and slower decarbonization progress.