Buzzi Unicem unaffected by rise in cement producers.

(CercleFinance.com) - On European stock markets, the Italian Buzzi Unicem, the 17th largest cement producer, is one of the few in its sector not to have benefited from the forthcoming merger between Lafarge and Holcim.
The stock has remained flat at around 13 euros since 1 January, while on average, other sector players have risen by 22%.

2013 cement sales of the Piedmontese group increased 0.3% to 27.4 million tonnes, although its revenue fell by 2.1% to 2.75 billion euros. The group's EBITDA margin improved slightly to 16.5%, although net profit, which was penalised by depreciation, was negative at around 50.7 million euros. Conservative management only expects a slight improvement in operating performance this year.

However, according to the consensus, Buzzi Unicem's earnings per share are expected to reach 0.45 euro in 2014, followed by 0.74 euro in 2015 and 1.09 euro in 2016, which is one of the best earnings sequences expected by analysts. In both 2014 and 2015, the share's P/E works out in the middle of the range (29x and 17.7x), even though it is above that of Lafarge and Holcim.

While the stock is not cheap, is not yet excessively valued either. However, would a takeover bid be feasible? Buzzi Unicem's capital remains controlled by the Buzzi family, who recently was more of a predator than prey, with the acquisition of the German group Dyckerhoff, which it finalised in 2006.

Exane BNP Paribas analysts have a target price of 16 euros, while on average the consensus expects 14 euros.


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