Numis has lowered its rating on CRH (LON:CRH) to ‘hold’, noting that the group’s share price is now only marginally below its target, Proactive Investors reports. The move came after the Irish building materials group unveiled plans to bring together some of its European and American units.
CRH’s share price has climbed into positive territory in today’s session, having gained 0.68 percent to 2,804.00p as of 14:21 BST. The shares are marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.52 percent higher at7,742.04 points.
Numis trims rating on CRH
Numis trimmed its stance on CRH from ‘add’ to ‘hold’ today, in the wake of the group’s announcement last week that it will establish a new global Building Products division effective January 1 next year, bringing together its Europe Lightside, Europe Distribution and Americas Products divisions.
Proactive Investors quoted the analysts as saying in a note that in response to the weak share price, the group’s management had announced a €1-billion share buyback programme and a number of business improvement initiatives, which lead to a 20-percent increase in CRH’s share price from its lows.
“With CRH’s share price now only marginally below our 2870p target price, we move our recommendation from Add to Hold,” the analysts pointed out, adding that the FTSE 100 group’s management was now targeting a 300bps improvement in CRH’s EBITDA margin by 2021, and they estimate that around half of this progression will be driven by organic growth and operating leverage.
Other analysts on group
Societe Generale, which sees CRH as a ‘buy,’ set a price target on the stock of 3,500p on Friday. According to MarketBeat, the Irish building materials group currently has a consensus ‘buy’ rating and an average price target of 3,059p.