Dolmen positive on CRH prospects

Having beaten the consensus forecast for its first-half profit, it is no surprise to hear that Dolmen Butler Briscoe is giving a buy recommendation on CRH, despite the fall in its share price in the wake of its announcement of plans to place stock equivalent to about 5 per cent of its current ordinary shares.

While it admits CRH is trading at a premium to its sector, Dolmen feels the fact that it is trading at a 10 per cent discount to its closest competitor, Holderbank, together with its track record on earnings, means there is currently a buying opportunity. It has set a 12-month target of between €21.50 (£16.90) and €22, compared to its current level around €19.90.

Further support for the stock comes from Merrill Lynch, which has made CRH one of its construction sector bulls and anticipates even better growth rates next year, in a climate where European construction confidence stands at a 10-year high.