Shares in CRH (LON:CRH) have jumped more than one percent in London in today’s session, as Morgan Stanley named the group its top pick in European building materials sector, pointing to ‘robust’ outlook for the company. The upbeat comments come after the FTSE 100 buildings materials group recently agreed the acquisition of Ash Grove Cement.
As of 13:56 GMT, CRH’s share price had added 1.20 percent to 2,701.42p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.07 percent higher at 7,391.84 points. The group’s shares have lost more than one percent of their value over the past year, and are down by some four percent in the year-to-date.
CRH named top pick
Morgan Stanley lifted its rating on CRH from ‘equal weight’ to ‘overweight’ today, and named the company its top pick in the European building materials sector. WebFG News quoted the analysts as arguing that the addition of US cement manufacturer Ash Grove was seen as a value-accretive deal that along with the FTSE 100 group’s ‘material transformation’ over the past three years appears to be ‘undervalued’ by the market.
The broker expects CRH to provide more details on Ash Grove’s profitability and targets in its trading update on Tuesday, initially estimating at least €100 million of synergies.
“Coupled with continued positive contribution from building, this should result in 2-3% volume growth per annum near-term for cement and aggregates,” Morgan Stanley pointed out.
Other analysts on CRH
As of November 17, the consensus forecast amongst 21 polled investment analysts covering CRH for the Financial Times has it that the company will outperform the market. According to MarketBeat, the building materials company currently has a consensus ‘buy’ rating and an average price target of 3,263.14p.