Canaccord ups target on CRH, sees medium-term potential

Analysts at Canaccord Genuity hiked their target price on shares of CRH, telling clients they expected growth momentum in the firm's main markets to be sustained over the next couple of years.

Acquisition spend would also return to more normalised levels, Aynsley Lammin and Matthew Walker said in a research report sent to clients.

Canaccord revised its target price from €35.0 to €37.0 while reiterating its recommendation to 'Hold'.

In the US, greater clarity from the Fixing America's Transportation Act as well as Trump's push on infrastructure, they said.

Pricing in Europe would not match that in the States, they admitted, but Europe did look set to continue enjoying a modest recovery in volumes.

Acquisitions would continue, but the focus of deals would be enhancing earnings, the analysts said.

CRH had the potential to reach and beat its previous peak margins and returns, Lammin and Walker added.

"Valuation is not particularly cheap but [...] we see further upside on a medium-term view, especially if acquisitions are made at attractive multiples [...]

"There is also the potential for a more significant infrastructure spend and lower tax rate in the US to boost earnings over the medium-term."