CRH surge gives concrete boost to Iseq

Cantillon: Market signals support for CRH decision to spend up to €1bn of own stock

CRH: taking a breather from mergers and acquisitions deals. Photograph: Brenda Fitzsimons

CRH: taking a breather from mergers and acquisitions deals. Photograph: Brenda Fitzsimons

 

Where CRH goes, so too goes the Iseq.

The Irish market has gained as much as 12 per cent from its lows in March, coming this week within 40 points of its February highs – which themselves had marked the Irish stock market’s highest level in more than a decade.

The move had been fuelled in no small way by an almost 20 per cent surge by shares in CRH, which makes more than a quarter per cent of the Iseq.

The market really seems to have got on board with the building material giant’s decision last month to spend up to €1 billion of its own stock in the next year, as it takes a bit of a breather from mergers and acquisitions deals. (A rally by the dollar in recent months has also helped.)

The company’s logic is that the market hadn’t been valuing the “intrinsic” worth of CRH’s shares, which pulled back heavily last year, as investors took a more circumspect view of US president Donald Trump’s infrastructure spending plans and seemed to ignore the potential of a recovering Europe.

But while analysts at Wall Street giant JP Morgan decided on Wednesday to reinitiate coverage of CRH’s stock with an “overweight” rating – the equivalent of a “buy” – and upside share price target, the stock traded down 2.1 per cent. It contributed to a 0.74 per cent fall by the Iseq.

JP Morgan said in the note that it preferred CRH to European peers HeidelbergCement and LafargeHolcim. But is Wednesday’s price drop a pause for breath, or beginning to reflect whispers of concern about the US and European economies beginning to slow down?

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.