Kepler Cheuvreux starts Amrize coverage with “buy call, sees 30% upside

Investing.com -- Kepler Cheuvreux has initiated coverage on Amrize AG (SIX:AMRZ), Holcim’s former North American business, with a “buy” rating and a target price of CHF50, representing a 29.6% upside from its current price of CHF38.57. 

The brokerage’s analysts, Carlos Caburrasi and Luis Prieto, said the valuation justifies at least 12x EV/Adj. EBITDA 2026E, supported by pricing power, expected volume recovery, and higher U.S. peer multiples.

Since its June 2025 spin-off from Holcim , Amrize’s shares have underperformed, weighed down by “short-term infrastructure funding uncertainties, a delayed residential recovery, [and] U.S. domestic investors’ limited familiarity with the investment case.” 

Meanwhile, Holcim shares have “significantly outperformed versus Amrize since the spin-off,” according to the analysts.

Amrize’s operations are entirely based in North America, spanning more than a thousand facilities across the U.S. and Canada, including 18 cement plants and 45 building-envelope facilities. 

The company’s end-market exposure comprises 49% commercial, 28% infrastructure, and 23% residential. It manufactures both heavy building materials, cement, aggregates, concrete, and asphalt, and light building materials such as roofing, insulation, and sealants.

The analysts expect Amrize to post 4.6% annual organic growth between 2026 and 2030, driven by 2.2% annual volume progress and 2.3% price growth. 

“Good operating leverage should translate into a 7.1% EBITDA CAGR, resulting in healthy 12.3% annual bottom-line growth, all excluding M&A,” the brokerage said. Amrize’s adjusted EPS is projected to rise from $2.27 in 2025 to $2.98 in 2027, with adjusted EBITDA increasing from $3 billion to $3.4 billion over the same period.

Free cash flow generation is forecast to strengthen from $1.38 billion in 2025 to $1.90 billion in 2027, while net financial debt is expected to decline from $3.67 billion to $1.12 billion. The brokerage projects a free cash flow yield rising from 5% to 7%, and a return on invested capital improving from 8% to 9.7%.

Kepler Cheuvreux’s target price of CHF50.00 is derived from a five-year discounted cash flow model, translating into an implied EV/Adj. EBITDA 2026 multiple of 12.4x versus the current 10x. 

“A US-peer comparison would suggest an even higher 14.2x (implying additional upside of 22%),” the analysts said, adding that “a re-rating once the US domestic investor base gets to know the stock better” is likely.

Medium-term growth prospects are supported by ongoing infrastructure and housing policies, including the Infrastructure Investment and Jobs Act and the bipartisan ROAD to Housing Act of 2025. 

Amrize’s portfolio, according to the report, stands to benefit from “the continuation of the previous administration’s Infrastructure Investment and Jobs Act (IIJA)” and growing demand from “technological construction segments (i.e. data centres).”

Risks include potential freezes to IIJA funding under the Trump administration, interest rate developments affecting residential demand, and potential merger activity.

“We initiate coverage with a Buy rating,” Caburrasi and Prieto added, flagging Amrize’s “solid pricing growth, supported by demand growth, low-carbon solutions and system selling approach.”