Bernstein has initiated coverage on CRH, assigning the stock an Outperform rating and setting a price target of $115. The firm has started its analysis of the European building materials sector, highlighting a preference for companies at opposite ends of the market spectrum. Bernstein favors the commoditized, highly localized heavy materials segment due to their strong pricing capabilities. Additionally, the firm is optimistic about the differentiated end of the lighter materials market, which operates efficiently on a global scale and has significant room for market expansion and pricing strength.
CRH Key Business Developments
Release Date: May 06, 2025
- Total Revenue: $6.8 billion, 3% increase from prior year.
- Adjusted EBITDA: $495 million, 11% increase from prior year.
- Margin Expansion: 50 basis points improvement.
- Net Debt: $12.7 billion at the end of Q1 2025.
- Net Debt to Adjusted EBITDA Ratio: Approximately 1.8 times.
- Cash Outflow: Approximately $700 million in Q1.
- Capital Expenditure: $600 million invested in Q1.
- Share Buybacks: $300 million returned to shareholders in Q1.
- Quarterly Dividend: $0.37 per share, 6% increase from prior year.
- Americas Materials Solutions Revenue: 2% increase from prior year.
- International Solutions Revenue Growth: 7% increase, with 22% increase in adjusted EBITDA.
- Full Year Adjusted EBITDA Guidance: $7.3 billion to $7.7 billion.
- Full Year Net Income Guidance: $3.7 billion to $4.1 billion.
- Full Year Diluted EPS Guidance: $5.34 to $5.80.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CRH PLC (CRH, Financial) reported a strong start to 2025 with growth in revenues, adjusted EBITDA, and margin despite adverse weather conditions.
- The company completed 8 value-accretive bolt-on acquisitions for approximately $600 million, enhancing its market position.
- CRH PLC (CRH) reaffirmed its financial guidance for 2025, expecting full-year adjusted EBITDA between $7.3 billion and $7.7 billion.
- The company has a strong and flexible balance sheet with a net debt to adjusted EBITDA ratio of approximately 1.8 times.
- CRH PLC (CRH) continues to return cash to shareholders, with a $300 million share buyback and a 6% increase in the quarterly dividend.
Negative Points
- CRH PLC (CRH) reported a small loss in diluted earnings per share for Q1, reflecting the seasonal nature of its business.
- The Essential Materials segment saw a 3% decline in revenues due to lower weather-impacted volumes.
- The company experienced a cash outflow of approximately $700 million in Q1, typical for the season but still notable.
- Residential activity in the US is expected to remain subdued, impacting the Building Solutions segment.
- The company faces ongoing macroeconomic uncertainty, particularly in foreign exchange markets, which could impact future performance.
