Why It’s Time to Buy This Rocks and Cement Spinoff Stock You’ve Probably Never Heard Of

Amrize stock should benefit from the limited number of concrete, asphalt, and crushed stone facilities, like this one in Hyattsville, Md. (Nathan Howard/Bloomberg)

Amrize, spun off from Swiss building-materials company Holcim, is a bet on the U.S.

AMRZ

Amrize Ltd.

1-Year Price Chart

Created with Highstock 2.1.8

$49.95

as of market close July 2, 2025

Market Cap

$28.3 B

NTM P/E

17.5

Div Yield

1.6%

Beta

0

52 Week Range

$48.89

$53.00

Sticks and stones may break your bones, but for Amrize, recently spun off from Switzerland’s Holcim, cement and rocks are a pathway to profits—for the company and investors.

Amrize, whose name is an amalgam of “ambition rising,” is the top North American cement producer and a leader in “aggregates,” the crushed rock used in construction. It also has a large commercial roofing business. All three have favorable dynamics. It was cast off by Holcim, an international building materials company, on June 23, when it began trading on the NYSE.

The company aims to generate mid- to high-single-digit annual revenue growth over the next three years and produce roughly 10% gains in pretax cash flow, while steadily expanding margins. This would represent some of the best growth in the industry. The company’s stock, at around $49, trades for about 19 times projected 2025 earnings and a more reasonable 16 times projected 2026 earnings of $3 a share. The appealing narrative, combined with a reasonable stock price, could make Amrize a winner.

“In our view, Amrize offers an attractive, all-American growth story,” RBC Capital Markets’ Anthony Codling wrote in initiating coverage. “The story has only just begun.”

The story starts with Holcim. Climate-conscious European investors have penalized the company since cement production is carbon-intensive, and Holcim figured its North American business would get a better reception in the U.S. market, where investors are less wedded to sustainable investing.

Amrize is one of the larger spinoffs in the past few years, with a market capitalization of $28 billion, plus about $5 billion in debt. Based in Chicago, the company has a sufficiently large market value to be eligible for inclusion in the S&P 500 index. The minimum now is $22.7 billion. Amrize’s Swiss domicile is not an obstacle to index inclusion. Insurer Chubb, for instance, is domiciled there.

The 58-year-old Jan Jenisch, Amrize’s CEO, is considered a management star in Europe, where he delivered market-beating results at Sika, a Swiss industrial company, from 2011 to 2017, and then as CEO of Holcim starting in 2017.

“This is the world’s most attractive construction market, and we feel there is no company better positioned than Amrize,” Jenisch tells Barron’s in an email. “Now as an independent, publicly traded company, we have the focus, financial firepower, market-leading operations, and broad range of advanced branded solutions to unleash our full potential organically and with value-accretive M&A.”

The aggregates market has long been an investor favorite in the U.S. Cement, which is mixed with water, sand, or aggregates to make concrete, is economically sensitive, but suppliers benefit from favorable supply/demand dynamics. It’s nearly impossible to get the permits to build a new plant due to environmental roadblocks and community opposition. The last new cement plant was Amrize’s facility in Ste. Genevieve, Mo., which is the largest in the country, with over five million tons of annual capacity, about 20% of its North American output. The centrally located facility on the Mississippi River was completed in 2009. As a result, imports fill the gap and account for about 20% of U.S. cement demand.

“The North American cement market is attractive, misunderstood, and undersupplied,” RBC’s Codling tells Barron’s. He has an Outperform rating and price target of $61 on Amrize shares, up 22% from Wednesday’s close.

It’s a similar situation with aggregates, where local producers dominate due to the high cost of transportation relative to prices of just $50 a ton. Amrize has 1,000 sites and facilities throughout North America, including 18 cement plants. In aggregates, it’s No. 1 or 2 in 85% of its markets, with 462 operations.

Codling isn’t the only bullish analyst. Several have Buy ratings and price targets around $60 a share, including Keith Hughes of Truist Securities, who wrote that the U.S. listing could help Amrize’s valuation. Hughes cited European companies like CRH, which specializes in building materials, and Ferguson Enterprises, which is focused on plumbing supplies, that shifted their primary listings to the U.S.

At its investor day in March, Amrize made financial projections through the end of 2028. It sees 5% to 8% annual revenue growth, 8% to 11% growth in earnings before interest, taxes, depreciation, and amortization, or Ebitda, and over $8 billion of free cash flow, an average of $2 billion a year, up from $1.7 billion in 2024. There was no projection of earnings per share. Codling says revenue and Ebitda projections are some of the higher ones among peers. And as an independent company, Amrize can focus on growth “without having to compete internally for capital within a group where cash returns and sustainability rank above growth,” he wrote.

The company’s priorities, in order, are capital expenditures, acquisitions, dividends, and stock buybacks. The company hasn’t declared a dividend yet or given guidance on a payout ratio. Codling sees a payout ratio of 30% and an initial annual dividend of 82 cents a share, resulting in a yield of 1.6%. Codling estimates about $300 million of annual buybacks, or about 1% of the shares outstanding. If the stock languishes, Amrize could get more aggressive with buybacks.

Institutional investors tend to value cement and aggregates makers based on Ebitda. Amrize trades for about 10 times projected 2025 Ebitda and nine times next year’s estimate, well below Martin Marietta Materials and Vulcan Materials, U.S.-focused aggregates producers that trade at about 15 times 2025 Ebitda and 30 times earnings. CRH has a comparable valuation to Amrize, but differs because it has operations in Europe.

Spinoffs don’t generate the hype of IPOs, and Amrize doesn’t fit hot themes like artificial intelligence. But that shouldn’t detract from a company well situated in three attractive businesses that is still building an investor base.

It may be wise to buy now before Amrize gets better discovered.

Write to Andrew Bary at andrew.bary@barrons.com