CRH Outperforms European Peers in Strong First Half; 20% Upside From Our Raised FVE

Narrow-moat CRH's strong first-half performance highlighted why we view the business as the most defensive in our European building manufacturer coverage. Organic revenue grew 12% year over year, in line with its peers. However, we were most impressed by the 90 basis points of EBITDA margin expansion to deliver 13% organic EBITDA growth, despite a challenging cost environment. We've raised our fair value estimate to GBX 3,950 per share from GBX 3,550, mostly due to currency translation, and are keeping our $47.50 ADR valuation unchanged. We reiterate CRH as our preferred pick, offering investors roughly 20% of upside at current levels from our revised fair value estimate and an undervalued play to get exposure to U.S. infrastructure spending.