On Monday, Stifel adjusted its stance on CRH Plc (NYSE:CRH:LN) (NYSE: CRH) stock, downgrading from Buy to Hold, while slightly raising the price target to $82.00 from the previous $80.00. The firm's analysts cited a re-rating following its US relisting and a comparative analysis with European peers, which now seem to have a significant catch-up potential.
CRH, a company with substantial exposure to North American infrastructure, has been one of Stifel's preferred stocks for years. However, the analysts now believe that the stock offers limited upside potential. This view comes despite the company's reasonable housing exposure and potential benefits from a strong US infrastructure market.
The analysts at Stifel noted that CRH's seasonality appears to be less defensive compared to the sector, which has influenced their revised outlook. They also mentioned that while the stock has seen a re-rating over the past couple of years, the current valuation methods suggest that it is now fairly valued.
Stifel's evaluation is based on normalized and Sum of the Parts (SOTP) valuation approaches. The analysts acknowledged that their current price target does not factor in the possibility of earnings upgrades that could stem from a robust US infrastructure market and CRH's significant funding capacity. The new price target of $82.00 reflects a marginal increase from the prior target but comes with a more cautious view on the stock's near-term growth prospects.
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