CRH Earnings: Organic Revenue Growth Exceeds Peers Driven by Robust US Construction Spending

Narrow-moat CRH's first-quarter organic revenue growth of 1% outperformed its Europe-listed peers, reinforcing our view that it is the most defensive pick in the sector. Outperformance was driven by 13% organic growth from its American Materials division, which is supported by recently signed US legislation, underpinning strong demand for infrastructure and commercial construction in the region, as well as larger-than-usual order backlogs. The first quarter is the least significant for the sector, and therefore, management has maintained its full-year guidance, which remains superior to Holcim and Heidelberg Materials at the end of the first quarter, due to CRH's greater exposure to US infrastructure spending. Shares are trading in overvalued territory to our $68 fair value estimate, which we maintain.