Holcim Rating Upgrade by BNP Paribas
BNP Paribas upgraded Holcim's rating to "outperform" from "neutral" and increased its target price by 19% to CHF 92, up from the prior target of CHF 77. The current share price of CHF 75.8 translates to a 21% upside to the new target. The broker also raised the target for Holcim’s U.S.-listed American depositary receipts to $23 from $19.10, likewise implying a 21% upside.
Analysts lifted Holcim’s FY2026 earnings‑per‑share estimate by 2% and the FY2027 EPS estimate by 5%, citing favourable foreign‑exchange movements. The revised forecasts place Holcim 5% ahead of consensus for FY27 earnings per share.
The upgrade is underpinned by double‑digit organic EBIT growth expectations and further margin expansion in 2026‑27. BNP Paribas highlighted that Holcim is “riding a wave of higher European cement prices, strong demand in Latin America/North Africa and a turnaround in Mexico,” with management execution and currency benefits reinforcing the outlook.
Regarding carbon regulation, the note states that refined EU carbon legislation will remain rigorous enough to steepen the cost curve, force rationalisation, and ultimately benefit major producers such as Holcim.
Holcim enjoys the largest regional sales exposure, accounting for roughly 56% of group revenue, and delivers the sector‑leading European margin of approximately 25%. The company also performs well on carbon intensity across its extensive, consolidated plant network.
On capital allocation, Holcim holds about CHF 2.4 billion in merger‑and‑acquisition reserves at year‑end, which BNP Paribas projects to exceed CHF 5 billion by 2028. Recent acquisitions have been described as financially and strategically sensible, and future M&A activity is expected to be accretive given Holcim’s low financing costs, attractive valuation multiple, and disciplined management.
Valuation-wise, Holcim’s share price has re‑rated 9% in one month, now trading at over 20× the estimated 2026 price‑to‑earnings multiple. This multiple is supported by a ~3% growing dividend yield, sector‑leading financial KPIs, and an additional 50 basis‑point premium for capital allocation, consistent with the treatment of peer Heidelberg. These factors together drove the target price increase from CHF 77 to CHF 92.