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Holcim Ltd HOLN

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Stock XSWX Rating as of
CHF 77.54 −0.28 (0.36%)
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As of Delayed Price Post-Trading: —
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Company Report

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Holcim: Margin-Accretive Investments Can Support Record Profitability; Raising Our Fair Value by 20%

Matthew Donen

We’re raising narrow-moat Holcim’s fair value estimate by 20% to CHF 72 from CHF 60 after reviewing its annual report, which highlights the impressive operating margin it earned from its products and solutions segment, and provides further clarity about how its role in decarbonizing cement will be margin-accretive. Having achieved margin expansion of 150 basis points during fiscal 2023, we believe Holcim can maintain current levels in the medium term, increasing our average EBIT margin to 18.0% between 2024 and 2027 from 17.4%. Shares remain at a slight premium.

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Price vs Fair Value

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HOLN is trading at a 8% premium.
Price
CHF 77.82
Fair Value
CHF 52.00
Uncertainty
Medium
1-Star Price
CHF 52.30
5-Star Price
CHF 62.90
Economic Moat
Fxdyrd
Capital Allocation
Drtryjln

Bulls Say, Bears Say

Bulls

The shift in Holcim's portfolio toward materials with lower capital intensity has provided a more resilient business.

Bears

Customers are unlikely to tolerate further price increases of building materials given the magnitude of price rises during the last three years.

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Trading Information

Previous Close Price
CHF 77.82
Day Range
CHF 76.18–77.60
52-Week Range
CHF 54.34–81.98
Bid/Ask
CHF 0.00 / CHF 78.00
Market Cap
CHF 43.56 Bil
Volume/Avg
1.6 Mil / 1.4 Mil

Key Statistics

Price/Earnings (Normalized)
13.34
Price/Sales
1.64
Dividend Yield (Trailing)
3.21%
Dividend Yield (Forward)
3.21%
Total Yield
6.89%

Company Profile

Holcim is a global manufacturer of a wide range of building materials. The merger between Lafarge and Holcim in 2015 created a leader in the building materials sector. Recent portfolio management diversified the group's exposure to heavy building materials. Approximately 40% of revenue is earned in North America.
Sector
Basic Materials
Industry
Building Materials
Stock Style Box
Large Core
Total Number of Employees
63,448
Website
https://www.holcim.com

Competitors

Valuation

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Metric
HOLN
CRH
HEI
Price/Earnings (Normalized)
 13.3416.589.57
Price/Book Value
 1.682.651.00
Price/Sales
 1.641.630.83
Price/Cash Flow
 8.3710.395.12
Price/Earnings
HOLN
CRH
HEI

Financial Strength

Metric
HOLN
CRH
HEI
Quick Ratio
 1.081.080.78
Current Ratio
 1.441.691.19
Interest Coverage
 8.0511.1313.68
Quick Ratio
HOLN
CRH
HEI

Profitability

Metric
HOLN
CRH
HEI
Return on Assets (Normalized)
 5.64%7.92%5.65%
Return on Equity (Normalized)
 11.43%17.26%11.51%
Return on Invested Capital (Normalized)
 8.99%11.28%7.98%
Return on Assets
HOLN
CRH
HEI
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Building Materials Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
CRH
CRH PLCQrrhqrbtcHmkfdj$54.0 Bil
HCMLY
Holcim Ltd ADR—Qhpzz$48.0 Bil
HCMLF
Holcim LtdYynfcxsksYvxbd$48.0 Bil
MLM
Martin Marietta Materials IncHczzlbmlcQbbbkfz$36.2 Bil
VMC
Vulcan Materials CoKwfhnrztYffhtzn$34.2 Bil
HDELY
Heidelberg Materials AG ADR—Qnd$18.4 Bil
HLBZF
Heidelberg Materials AGJvymyhbbZlsjm$18.4 Bil
AHCHY
Anhui Conch Cement Co Ltd ADR—Qxrlk$15.5 Bil
AHCHF
Anhui Conch Cement Co Ltd Class H—Yfbfmjx$15.5 Bil
JHX
James Hardie Industries PLC ADRPmgrwnblHjpc$15.2 Bil

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