Goldman Sachs initiates coverage on Neutral, sets price target at $57.

Goldman Sachs initiates coverage on Neutral, sets price target at $57.

Goldman Sachs has initiated coverage on Amrize (NYSE: AMRZ), a North American cement and roofing company, with a "neutral" rating and a 12-month price target of $57, representing a 15% upside from the June 30 closing price of $49.55 [1]. The brokerage's evaluation flags Amrize’s leading position in U.S. cement, balanced against near-term headwinds in construction demand.

Amrize holds a 23% share of the 104 million ton U.S. cement market, the highest among domestic producers, with over 50% local market share within a 150-mile radius of its plants. This geographic concentration provides pricing power in a sector where transport costs are high. Goldman estimates Amrize’s cement EBITDA margins at approximately 40%, underpinned by a logistics network that ships more than 60% of cement by rail and barge.

The company’s operational scale includes 18 cement plants (13 U.S., 5 Canada), 141 terminals, and 55 cementitious operations. Amrize’s Building Materials segment accounts for 71% of sales and 77% of EBITDA, while its Building Envelope business, developed through seven acquisitions since 2021, makes up 29% of sales and 23% of EBITDA. Building Envelope margins have expanded from 15% in 2021 to 23% in 2024.

Revenue is projected to rise modestly from $11.7 billion in 2024 to $12.9 billion by 2027. Earnings per share is expected to increase from $2.69 in 2024 to $3.60 in 2027. Free cash flow per share is forecast at $0.07 in 2025, rising to $3.92 in 2027. Amrize is targeting capital returns with $1.6 billion in planned share repurchases annually from 2026.

The U.S. cement industry remains in a structural net import position, with 24% of demand met by imports due to prohibitive domestic replacement costs ($800–$1,000 per ton). Amrize imports only a small portion of its cement, largely from Canada. The company is investing in capacity expansions, including a fifth mill at its St. Genevieve plant and a new clinker line in Quebec.

Despite these strengths, Goldman Sachs cites a deceleration in private non-residential construction as a limiting factor. Construction spending is expected to grow just 1% in 2025, down from 7% in 2024, driven by weaker trends in manufacturing, warehousing, and office space.

References:
[1] https://www.investing.com/news/stock-market-news/goldman-sachs-initiates-coverage-on-amrize-with-neutral-rating-4118984
[2] https://www.tipranks.com/news/the-fly/nike-upgraded-sportradar-initiated-wall-streets-top-analyst-calls-thefly
[3] https://www.investing.com/news/analyst-ratings/goldman-sachs-initiates-coverage-on-amrize-stock-with-neutral-rating-93CH-4118730