CRH Earnings: Guidance Raised as Robust Demand Met With Price Hikes; Fair Value Increased by 9%

We’re raising our fair value estimate for narrow-moat CRH to $74 from $68 following its strong second quarter, which corresponded with an increase in its full-year EBITDA and net income guidance by 3% at the midpoint. Robust demand for US infrastructure and nonresidential construction has created a healthy pricing environment for building materials, driving second-quarter EBITDA growth of 12% year over year, beating FactSet consensus estimates. The increase in CRH's full-year guidance implies 12% growth for the full year, comfortably ahead of Europe-listed peers and has clearly impressed the market, sending shares 9% higher. We view shares as fairly valued relative to our revised fair value estimate.