Is CRH Still a Buy Despite Its S&P 500 Inclusion and Elevated Valuation?

The inclusion of CRH (NYSE:CRH) in the S&P 500 index in late 2025 marked a pivotal moment for the global building materials giant, signaling institutional validation of its growth trajectory. However, with its valuation metrics-such as a price-to-earnings (P/E) ratio of 24.28 and a price-to-book (P/B) ratio of 3.49-now elevated relative to historical norms, investors are left questioning whether the stock remains a compelling buy. This analysis examines CRH's valuation realism amid infrastructure tailwinds, market re-rating dynamics, and strategic execution to determine if the company's premium pricing is justified.

Valuation Metrics: Elevated but Contextualized

CRH's current P/E ratio of 24.28, as of January 2026, exceeds its 10-year historical average of 17.1 by 42% and its trailing 12-month (TTM) P/E of 22 as of January 2026. While this suggests a premium, the ratio remains 9% below the Basic Materials sector average of 26.75 according to data, indicating relative value within its industry. The forward P/E of 18.63 for fiscal year 2025 further suggests that the market is pricing in future earnings growth.

On the price-to-sales (P/S) front, CRH's ratio of 2.26 as of January 2026 is below the sector's 2025 average of 3.1x as reported, a metric that historically reflects revenue growth and operational efficiency. This divergence highlights CRH's stronger revenue generation relative to peers, particularly given its vertically integrated operations and strategic acquisitions. Meanwhile, the P/B ratio of 3.49, up 14.43% from its 12-month average according to FinanceCharts, reflects investor confidence in the company's asset base and profitability.

Infrastructure Tailwinds: A Catalyst for Sustained Growth

CRH's exposure to U.S. infrastructure spending, particularly under the Infrastructure Investment and Jobs Act (IIJA), positions it as a key beneficiary of long-term tailwinds. The IIJA, which allocates $1.2 trillion over eight years, is expected to see peak disbursements in 2026 and 2027. CRH's Americas division, which accounts for a significant portion of its revenue, is uniquely positioned to capitalize on this, given its dominance in aggregates, ready-mix concrete, and construction materials.

Recent operational results underscore this potential. In Q3 2025, CRH reported total revenues of $11.1 billion, a 5% year-over-year increase, driven by robust demand and margin expansion. Adjusted EBITDA of $2.7 billion, up 10% year-over-year, further highlights the company's ability to convert revenue into profitability. Strategic acquisitions, such as the December 2025 purchase of North American Aggregates, have bolstered CRH's capacity to meet surging infrastructure demand, particularly in New York and New Jersey.

Market Re-Rating: Justified by Fundamentals or Overhyped?

CRH's inclusion in the S&P 500 has attracted broader institutional ownership, contributing to a valuation re-rating. As of December 2025, the stock hit a 52-week high of $128.25, with a market capitalization of $85.5 billion according to MarketBeat. Analysts have responded by raising price targets, with Bernstein increasing its target from $115 to $130 as reported. A consensus price target of $130.64 implies a potential 9.7% upside from the current price.

However, valuation realism requires scrutiny. A discounted cash flow (DCF) model estimates a fair value of $119.33 according to Yahoo Finance, while another analysis suggests $106 as noted, creating a range that reflects divergent assumptions about growth sustainability. CRH's PEG ratio of 1.83 according to Yahoo Finance, which compares its P/E to earnings growth expectations, indicates a premium valuation. Yet, given the company's track record of margin expansion and its strategic focus on value-accretive acquisitions, this premium may be justified.

Risks and Considerations

While infrastructure tailwinds and operational execution are compelling, risks persist. A slowdown in U.S. infrastructure spending or regulatory delays could dampen growth. Additionally, CRH's elevated valuation leaves less room for error, as any missteps in execution could lead to a re-rating. However, the company's strong balance sheet, with $600 million in Q1 2025 acquisitions, and its commitment to shareholder returns (via dividends and buybacks) provide a buffer against volatility.

Conclusion: A Buy with Caution

CRH's inclusion in the S&P 500 and elevated valuation reflect its transformation into a mature, infrastructure-driven growth story. While its P/E and P/B ratios are above historical averages, these metrics are contextualized by robust earnings growth, sector-leading revenue generation, and strategic positioning in the IIJA-driven market. For investors who believe in the durability of U.S. infrastructure spending and CRH's operational execution, the stock remains a buy. However, those wary of overvaluation should monitor near-term earnings and infrastructure policy developments to ensure the company's fundamentals continue to justify its premium pricing.