CRH: Oddo's best sector pick
(CercleFinance.com) - Today Oddo has published a review of the building materials sector.
The broker said that disposals of cement assets seem inevitable; it prefers CRH and are buyers of HeidelbergCement, Saint-Gobain, and Vicat".
Oddo has a buy rating on CRH and has set a target price of 36 euros. The company has announced new disposals amounting to 1.5 billion to 2.0 billion euros (strategic review of the Distribution business for Europe), although it thinks that in the longer term the group will also sell its subsidiary in the Philippines given the limited cash that it generates, the broker says.
The broker is playing: 1/ the integration of acquisitions made in 2018 (consolidation of Ash Grove/cement assets in Florida), 2/new proximity acquisitions (attributed funds of around 0.5 billion euros (e), 3/ a favourable comparison basis, after just a 2.4% increase in EBITDA at a constant consolidation scope in 2017, 4/ an attractive valuation, considering the group's quality (FCF ~ 6%).
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The broker said that disposals of cement assets seem inevitable; it prefers CRH and are buyers of HeidelbergCement, Saint-Gobain, and Vicat".
Oddo has a buy rating on CRH and has set a target price of 36 euros. The company has announced new disposals amounting to 1.5 billion to 2.0 billion euros (strategic review of the Distribution business for Europe), although it thinks that in the longer term the group will also sell its subsidiary in the Philippines given the limited cash that it generates, the broker says.
The broker is playing: 1/ the integration of acquisitions made in 2018 (consolidation of Ash Grove/cement assets in Florida), 2/new proximity acquisitions (attributed funds of around 0.5 billion euros (e), 3/ a favourable comparison basis, after just a 2.4% increase in EBITDA at a constant consolidation scope in 2017, 4/ an attractive valuation, considering the group's quality (FCF ~ 6%).
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.