J.P. Morgan upgrades Holcim, adds Heidelberg to AFL

Investing.com –J.P. Morgan analysts have revised their outlook on European cement stocks, upgrading Holcim (SIX:HOLN) to an Overweight rating and adding Heidelberg (ETR:HDDG) to their Analyst Focus List (AFL). The moves reflect confidence in valuation, improving sector fundamentals, and near-term growth catalysts.

Holcim, which had underperformed its Heavyside peers by nine percentage points year-to-date, now presents a compelling valuation case. Analysts derive a 12% discount to its closest peer, Heidelberg, using a sum-of-the-parts (SOTP) analysis. 

The analysts value Holcim’s European Heavyside business at seven times its expected earnings for 2025, factoring in improving industry dynamics and the company’s aggressive decarbonization efforts. 

With the valuation seen as attractive and catalysts on the horizon—including dedicated capital markets days early in 2025—analysts expect further investor interest. Holcim’s new price target is CHF 108, representing a 23% upside from its current share price.

Heidelberg, upgraded to the AFL and set as J.P. Morgan’s top pick in the Heavyside segment, benefits from improving fundamentals and its leadership in decarbonization efforts. 

The company plans to introduce the industry’s first carbon-captured net-zero cement and concrete by mid-2025. 

Analysts flag that premium pricing and attractive margins for these products are not yet fully accounted for in forecasts. 

Heidelberg is also pursuing a transformation initiative expected to yield €500 million in annual savings by 2026, presenting additional upside. The firm’s price target is €150, implying a 28% upside​.

J.P. Morgan projects earnings growth of about 7% in 2025, supported by improving pricing power, U.S. infrastructure spending, and increased investor focus on the European cement sector’s decarbonization journey.