CRH

CRH Plc - ADR

Industrial/Transportation


Presented:09/20/2023
Price:$54.99
Cap:$39.14B
Current Price:$92.97
Cap:$63.48B

Presented

Date09/20/2023
Price$54.99
Market Cap$39.14B
Ent Value$48.90B
P/E Ratio13.73x
Book Value$28.41
Div Yield1.87%
Shares O/S711.69M
Ave Daily Vol2,808,772
Short IntN/A

Current

Price$92.97
Market Cap$63.48B
CRH Plc manufactures and distributes building materials and products for the construction industry. It operates business through the following segments: Americas Materials, Europe Materials, and Building Products. The Americas Materials segment provides asphalt paving services and produces materials such as cement, aggregates, ready mixed concrete, and asphalt. The Europe Materials engages in the manufacture and supply of cement, lime, asphalt, and other materials in Europe as well as in the Philippines and Asia. The Building Products segment includes business operating across a portfolio of building product related platforms including architectural accessories and building envelope. The company was founded in 1970 and is headquartered in Rathfarnham, Ireland.

Publicly traded companies mentioned herein: CRH PLC (CRH), Ferguson PLC (FERG), Heidelberg Materials AG (HEI GR), Holcim AG (HOLN SW), Martin Marietta Materials Inc (MLM), Vulcan Materials Co (VMC)

Highlights

The presenter is long shares of CRH PLC (CRH), a large building products company with four segments: Americas Materials Solutions, Europe Materials Solutions, Americas Building Solutions, and Europe Building Solutions. CRH is primarily listed in Ireland despite its 75% US/25% Europe EBITDA mix, but the company is changing its primary listing to the US (the current ADR) on September 25th. The presenter highlights FERG as a recent example of this type of transition, and CRH has dealt with similar technical dynamics of forced selling from passive index holders, removals from European indices, and a lag between these removals and the addition to US indices. At this point, he thinks most of the forced selling has been completed, creating a compelling entry point at $55 per share (7x consensus 2024 EBITDA, 11x consensus 2024 FCF). Underwriting conservative SOTP multiples on consensus 2024 estimates, he reaches a $67 price target which should be aided by the shareholder base shifting toward US investors. His position is reinforced by the incremental benefit from index inclusion over the medium term. 

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