Building Materials

US highway contract awards - better than they seem

  • Sectors : Building Materials
  • Companies : Buzzi Unicem | Heidelberg Materials | CRH | Holcim

Ratings

Ratings and price correct at time of issue

Company Rating Date Previous Rating Date Closing Price
Buzzi Unicem OUTPERFORM 04/04/16 Neutral 05/08/15 2192c
CRH OUTPERFORM 23/05/12 Neutral 12/01/12 3483c
Heidelberg Materials OUTPERFORM 16/06/17 Neutral 05/02/14 6680c
Holcim NEUTRAL 09/01/19 Underperform 17/11/15 5182chf

DAVY VIEW

Highway contract awards softened again in October in sharp contrast to outlook comments from the US aggregates sector. That disconnect has been difficult to explain. The American Road and Transportation Builders Association (ARTBA) series tends to be lumpy, reflecting the size and timing of large contract awards. In many cases, these projects are awarded in a single month while the actual work takes place over several months or even years. In an effort to reflect that impact, we have adjusted the series to assume outsized projects take 12-36 months to complete. This paints a very different picture and tallies with expectations of mid-single-digit growth in 2020.

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Dec 11 2019, 14:45 GMT

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