CRH Shares Forecast August 2021 – Time to buy CRH Shares?
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Shares of building materials supplier CRH (LSE: CRH) have risen 2% on the day to reach £38.50 per share, becoming the FTSE 100’s strongest performer. The company has announced good sales growth figures for the first half of the year. Its shares have risen 34% over the past 12 months. Despite all this, the shares are still considered value for money.
CRH – Technical Analysis
According to CRH’s financial statement, the market cap of the company is at £30.535 billion with total assets worth £32.879 billion. Revenue for 2020 was at £21.51 billion with a profit margin of 4.07% compared to £22.05 billion in 2019.
Oscillators for CRH such as Stochastic RSI Fast (3, 3, 14, 14)(64), Williams Percent Range (14)(−22), Bull Bear Power (236) and Ultimate Oscillator (7, 14, 28)(64) are all neutral. Oon the other hand, Moving averages such as Exponential Moving Average (100)(3595), Simple Moving Average (100)(3620), Exponential Moving Average (200)(3426) and Simple Moving Average (200)(3403) are indicating a buy action.
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Recent Developments
In an update released on Thursday, CRH revealed that sales increased by 15% in the 6 months to June, reaching $14 billion, which bolstered earnings before interest, tax, depreciation, and amortisation (or EBITDA) to reach $2 billion. CRH’s Europe Materials business experienced the strongest growth in the first half of the year with sales jumping by 17%. This was due to the strong volume growth versus Compared to the Covid-19 hit period in 2020 and good price momentum in key markets.
The firm announced on March 23rd, 2021 that Jim Mintern has succeeded Senan Murphy as Group Finance Director. He joined the Board of directors on 1st June 2021. He joined CRH back in 2002 as finance director for Roadstone. He has since held multiple positions across the company including managing director of each of the western and eastern regions of its Europe Materials business and country manager for Ireland. It also appointed Caroline Dowling as non–executive director, a person who has previously held a senior executive designation with electronics contract manufacturer Flex.
Strong residential repair, maintenance and improvement (RMI) activity in North America also increased the revenue for the company’s building products arm by 8%. The corresponding American division increased by 3% in the same period which is attributed to improved volumes of aggregates, cement and ready-mixed concrete. The company expects to be one of the biggest beneficiaries of US President Joe Biden’s $1 trillion(€850 billion) spending splurge on roads and infrastructure improvements in the US.
Should You Buy CRH Shares?
Investors will be happy to see that the company’s bottom line also benefitted from a significant rise in its EBITDA margin which rose 120 basis points from the same 2020 period to 14.2%. Operating cash flow also increased to $1.6 billion, a 55% year on year increase. Because it generated record cash at the FTSE 100 firm, the company decided to raise the interim dividend by 4.5%. Many investors have bought CRH shares earlier in the year to ride the economic recovery and they haven’t been disappointed.
The prospects of the company will only improve as massive infrastructure spending in the US and improving construction markets contributes towards growth. Thursday’s release gave investors another reason to be excited about CRH shares. However, CRH’s recovery is threatened by rising Covid-19 infection rates across the globe. However, this scenario is baked into its price. At the current price, investors should definitely consider buying CRH shares.
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