Adrian Huerta, an analyst from J.P. Morgan, has initiated a new Buy rating on Amrize Ltd (AMRZ).
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Adrian Huerta has given his Buy rating due to a combination of factors that highlight Amrize Ltd’s potential for growth and value creation. The company is well-positioned in the building materials sector, with a significant portion of its EBITDA derived from its Building Materials segment, which includes cement and aggregates. This segment, along with its Building Envelope segment, provides a robust foundation for sustainable EBITDA growth, projected at 9-12% through 2028. The company’s strong free cash flow conversion rate of over 50% and a solid balance sheet with a net debt to EBITDA ratio of 1.0x enable strategic acquisitions, enhancing its growth prospects.
Amrize’s strategic focus on the North American market post-spin-off is expected to improve execution capabilities and valuation potential. The company’s ability to leverage its balance sheet for acquisitions, coupled with its proven track record in acquiring attractive businesses, particularly in the roofing segment, positions it well for future expansion. Additionally, Amrize’s trading at a discounted EV/EBITDA multiple compared to peers suggests room for stock re-rating, supported by potential inclusion in U.S. indices and a share buyback program. These factors collectively underpin Adrian Huerta’s optimistic outlook and Buy rating for Amrize Ltd.
In another report released on July 10, Bernstein also initiated coverage with a Buy rating on the stock with a $62.00 price target.