Berenberg's Reduced Holcim Price Target: Navigating the Spinoff's Strategic Shift and Growth Narratives

The June 23, 2025 spinoff of Holcim's North American business into Amrize has sparked a critical reevaluation of Holcim's intrinsic value. Analysts at Berenberg recently cut their price target for Holcim from CHF 92 to CHF 55, signaling skepticism about the Swiss cement giant's post-spin trajectory. Meanwhile, Amrize's standalone emergence as a pure-play North American construction solutions provider has created a stark divergence in growth narratives. Investors now face a pivotal choice: bet on Holcim's sustainability-driven diversification or Amrize's high-growth U.S. market focus. Here's how to parse the implications.

The Spinoff's Structural Shift: A New Playing Field

The Amrize spinoff marks Holcim's most significant strategic overhaul in decades. By divesting its North American operations—which contributed $11.7 billion in 2024 revenue—Holcim is refocusing on Europe, Australia, North Africa, and Latin America. Amrize, now a standalone entity, inherits a $3.4 billion debt facility and a 1:1 share distribution to Holcim shareholders.

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Berenberg's price cut reflects concerns about Holcim's ability to justify its former valuation without Amrize's high-margin North American operations. The firm's Neutral rating underscores lingering doubts about Holcim's execution of its “NextGen Growth 2030” strategy, which prioritizes decarbonization and infrastructure projects.

Amrize's Pure-Play Advantage: Growth at a Price

Amrize's independence unlocks a compelling narrative as a play on North American construction demand. With 1,000+ sites and 19,000 employees, it aims to achieve 5–8% annual revenue growth through organic expansion, margin improvements, and M&A. Its investment-grade credit ratings (BBB+/Baa1) and $8 billion cumulative free cash flow target by 2028 provide financial firepower.

Yet risks abound. Jefferies' Hold rating on Amrize at $52.5 reflects concerns about U.S. macro headwinds: weak residential demand and delayed commercial projects could slow near-term growth. The highlights the trade-off: Amrize's higher growth potential is tempered by execution risks, while Holcim's more stable profile lacks the same upside.

Holcim's Revised Targets: Sustainability vs. Valuation

Post-spinoff, Holcim retains a strong balance sheet ($2.2 billion pre-lease free cash flow in 2024) and a focus on high-margin sustainability initiatives. Its goal of 50% low-carbon product sales by 2030 aligns with European regulatory trends, while emerging markets like Latin America offer infrastructure-driven demand. Berenberg's skepticism may underestimate Holcim's ability to command premium pricing for green cement and building solutions.

However, Holcim's EBIT margin target of 20% by 2030 faces headwinds. Geopolitical risks (e.g., energy costs, trade policies) and slower European cyclical recovery could delay profitability. The shows the ambitious climb required.

Contrasting Analyst Views: A Tale of Two Strategies

Analyst divergences highlight the split between growth and stability:
- Berenberg's Neutral on Holcim: Reflects skepticism about Holcim's post-spin valuation and execution risks in its new strategic areas.
- Jefferies' Buy on Holcim (CHF65): Bets on European decarbonization tailwinds and Holcim's capital allocation discipline.
- Jefferies' Hold on Amrize ($52.5): Acknowledges growth potential but cautions against overpaying for North American macro exposure.

Investors must weigh these factors: Amrize's upside hinges on U.S. construction rebound and successful M&A, while Holcim's success depends on decarbonization demand and cost discipline.

The Investment Case: Choose Your Narrative

• Amrize (AMRZ): Ideal for investors willing to pay a premium for high-growth exposure to North America. Its inclusion in the Swiss Market Index (SMI) on day one of trading signals institutional confidence. However, a underscores higher leverage risks.
• Holcim (HOLN): A safer bet for those prioritizing sustainability and diversification. Its CHF55 target implies a 25% discount to pre-spin valuations, offering a margin of safety if its strategic shift succeeds.

Final Considerations: Risks and Tax Implications

Both companies face regulatory and macroeconomic risks. Amrize's tax-free status for U.S. shareholders and Holcim's Swiss tax neutrality are critical for investor returns. Geopolitical tensions (e.g., energy prices, trade barriers) could disrupt both strategies, but Amrize's North American focus may prove more resilient to European-specific headwinds.

Conclusion: Align with Your Appetite for Risk

Berenberg's price cut signals a recalibration of expectations, but it doesn't negate Holcim's long-term potential. Amrize's pure-play model offers growth at a premium, while Holcim's revised targets demand patience. Investors should align their choices with their risk tolerance: growth-oriented portfolios may favor Amrize's upside, while value investors might see Holcim's discounted valuation as a buy opportunity. As both companies navigate their distinct paths, the spinoff's success will hinge on execution—a lesson not lost on skeptical analysts.