Holcim Earnings: Third-Quarter Results Exceed Consensus Estimates, and EBIT Margin Guidance Raised

Narrow-moat Holcim reported organic EBIT growth of 14% to CHF 1.60 billion during the third quarter, marginally exceeding company-compiled consensus estimates of CHF 1.56 billion. EBIT margin expansion occurred across geographies and business units supported by higher pricing but also benefited from the divestment of its cement business in India last year. Similarly to Heidelberg Materials, which upgraded its EBIT margin guidance in its trading update last week, Holcim has followed suit, raising its full-year EBIT margin guidance to above 17% from 16%. We aren't surprised by the raise in its guidance and had forecasted margins of approximately 17%. We maintain our CHF 60 fair value estimate and view shares as fairly valued.