2) CRH plc (NYSE:CRH)
Expected Earnings Growth: 27.5%
Number of Hedge Fund Holders: 75
Forward P/E Multiple (As of September 30): 15.36x
CRH plc (NYSE:CRH) offers building material solutions in Ireland and internationally.
CRH plc (NYSE:CRH)’s ability to maintain pricing power even in the competitive market, together with its diversification and strong presence in North America, continues to make up its wide economic moat. Its diverse geographic footprint and product offerings further strengthen its competitive advantages. Moving forward, the company’s diversified business model, strategic acquisitions, and optimism around market trends should continue to drive revenue growth.
CRH plc (NYSE:CRH) made a strategic move by transforming itself into a predominantly US-focused company. Wall Street believes that the emphasis on the US market should continue to act as a potential catalyst for unlocking additional value. Significant opportunities in the US construction and building materials sector offer a strong growth narrative for CRH plc (NYSE:CRH).
By concentrating its efforts on North America, it plans to capitalize on the region’s robust construction activity and infrastructure development plans. With the expectation of improved infrastructure spending and construction activity in the US, CRH plc (NYSE:CRH)’s strategic positioning is expected to yield substantial benefits for the company and its shareholders.
CRH plc (NYSE:CRH) anticipates healthy demand in infrastructure and non-residential segments, with the anticipation of positive pricing momentum and continued margin expansion. The company increased its full-year adjusted EBITDA guidance, which is now expected in the range of $6.82 billion – $7.02 billion. This upward revision is backed by favorable market conditions and a strong balance sheet.
Truist Financial upped their price objective from $100.00 to $110.00, giving a “Buy” rating on 9th August. L1 Capital, an investment management firm, released its second-quarter 2024 investor letter. Here is what the fund said:
“Three companies detracted from the Fund’s performance by more than 0.5% – CRH plc (NYSE:CRH), Eagle Materials and Mastercard.
In our view, measuring the performance of investments over short time horizons such as three months is meaningless. While CRH and Eagle Materials detracted from the Fund’s returns this quarter, they were both leading positive contributors in the prior quarter. Since Inception of the Fund over 5 years ago, both companies have been top ten contributors to the Fund’s returns.
Recently, there has been some negative data that is causing a sell-off in the share price of CRH and Eagle Materials. Both these companies supply building products to the infrastructure, residential and commercial construction sectors. CRH has around 75% exposure to North America, with the remainder principally Europe (CRH has also recently acquired the majority of Adbri in Australia). Eagle Materials solely operates in the U.S.
Demand from the U.S. infrastructure sector is likely to remain robust for the medium term due to increased Federal and State spending, supported by the $1.2 trillion Infrastructure Investment and Jobs Act. Short term activity has been disrupted by bad weather – we think this is complete noise and is just slightly delaying projects, although CRH and Eagle Materials’ June 2024 quarterly results will likely be impacted…” (Click here to read the full text)
