CRH plc (CRH) has received a new Buy rating, initiated by Morgan Stanley analyst, Cedar Ekblom.
Cedar Ekblom has given his Buy rating due to a combination of factors that highlight CRH plc’s strong market position and financial health. One of the key reasons is CRH’s pricing power in both the US and European markets, particularly in aggregates and cement. This pricing power allows the company to maintain and grow its margins, even in the face of rising volume risks, as evidenced by its impressive ten-year track record of margin growth.
Additionally, CRH boasts superior cash conversion and a robust balance sheet, with the highest operating and free cash conversion rates among its peers in the US and EU heavyside building materials sector. The company’s leverage is also notably lower than its competitors, yet its shares trade at a discount, which Ekblom views as unjustified. Furthermore, CRH’s consistent track record in mergers and acquisitions, supported by its strong financial position, enhances its growth prospects. These factors combined make CRH an attractive investment opportunity, leading to Ekblom’s Buy rating.
In another report released on April 17, Jefferies also maintained a Buy rating on the stock with a £84.61 price target.