Building Materials

US Infrastructure finally over the line – one clear winner

  • Sectors : Building Materials
  • Companies : Holcim | CRH | Buzzi Unicem | HeidelbergCement AG | Saint-Gobain Group

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 1996c
CRH OUTPERFORM 23/05/12 Neutral 12/01/12 4960c
HeidelbergCement AG NEUTRAL 04/02/20 Outperform 16/06/17 6480c
Holcim OUTPERFORM 20/04/20 Neutral 09/01/19 4720chf
Saint-Gobain Group OUTPERFORM 29/01/21 Neutral 02/11/20 6107c

DAVY VIEW

The US House of Representatives finally passed the Infrastructure Investment and Jobs Act (IIJA) on November 5th. The IIJA includes a $300bn highway bill (replacing the FAST Act), with another $47bn in additional funding on top. In total, it amounts to a c.44% increase in Federal highway and bridge spending over the next five years. All our stocks have US exposure and will gain to some degree from the bill. However, CRH is the clearest beneficiary by some distance given its leading market positions, not just in aggregates, asphalt and paving but also in its growing infrastructure-facing products businesses. The shares have done well year-to-date, but the opportunity remains. The stock is not expensive, trading on a next 12-month P/E multiple of 15.4x and EV/EBITDA of 8.1x.

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Nov 8 2021, 08:30 GMT

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