CRH: Strong Pricing Drives Revenue Growth, and Healthy U.S. Backlogs Support Robust Outlook

Narrow-moat CRH reported organic revenue growth of 5% in its trading update for the first quarter, which tends to be the least material quarter for building material manufacturers. While CRH’s top-line growth was weaker than competitor Holcim's, we attribute this to the latter’s greater exposure to Asia and Latin America, where construction activity is less dependent on the second and third quarters of the year. We remain confident that CRH is well positioned for an increase in infrastructure spending in the United States; this is supported by management reiterating our view that backlogs and bidding activity are strong. We maintain our GBX 3,950/$47.50 fair value estimate and view the shares as fairly valued.