CRH changes

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View the full Oct 31, 2026 version

Price: $83.63 → $90.81(+8.6%)
Discount category: Below intrinsic value → Close to intrinsic value
Next earnings: Oct 30, 2026 → Jan 29, 2027
About: CRH makes and sells building materials and products, mainly in North America. Americas Materials Solutions produces aggregates, cementitious materials, asphalt and concrete and builds roads. Americas Building Solutions makes products for infrastructure, such as energy, water and data center projects, and for homes. International Solutions has materials and products businesses outside North America. Total revenues were removed: $10.8 added: $11.4 billion in removed: Q2 added: Q3 2026. CRH is listed on the New York Stock Exchange and reports in U.S. dollars. removed: In June added: On October 23, 2026, it removed: agreed to buy added: completed the purchase of Arcosa, a U.S. aggregates and infrastructure products company, for an enterprise value of about $8.5 billion. Jim Mintern is CEO.
Thesis: The market prices CRH for the risk of a slower U.S. construction removed: market added: market, for cost inflation and for the cost of its acquisitions. CRH removed: spent $1.4 billion on 17 acquisitions in added: completed the removed: first half added: purchase of removed: 2026 and agreed to buy Arcosa for about $8.5 billion removed: in cash, added: on October 23, 2026, with a added: term loan, a bridge facility and added: cash, and it invested a removed: term loan. Net debt rose to $15.4 added: further $1.9 billion removed: at June 30, added: in 27 acquisitions in 2026 to date. On October 29, 2026, removed: from $14.2 added: CRH cut its 2026 guidance to adjusted EBITDA of $7.8 billion removed: at December 31, 2025, added: to $8.0 billion because of cost inflation and added: weak residential removed: demand added: demand, even with Arcosa in removed: Americas Building Solutions was subdued. added: the fourth quarter. For the gap to close, three things must be true. CRH must removed: deliver added: reach its added: new 2026 guidance removed: of $8.1 billion to $8.5 billion of added: and grow adjusted EBITDA removed: and net income of $3.9 billion to $4.1 billion. The added: in 2027, as it expects from its main end markets. Arcosa removed: purchase must removed: close in Q1 2027 and deliver the planned $175 million of yearly cost synergies by year removed: three. added: three, and Velocity must deliver about $400 million of yearly benefits by the end of 2028. Leverage must removed: stay near added: fall after the removed: pro forma 2.4 times net debt to adjusted EBITDA that CRH expects, added: Arcosa purchase, so that removed: it added: CRH keeps a strong investment grade removed: rating. added: rating while it buys back shares. The removed: Q3 added: FY 2026 removed: report, estimated for about October 30, 2026, and added: report with the removed: Arcosa close are added: 2027 guidance, expected in early 2027, is the next removed: tests. added: test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in U.S. construction removed: spending, added: spending or more cost inflation, which CRH cannot control.
Risks: Demand for building materials depends on U.S. construction and public infrastructure spending. Residential demand was subdued in removed: Q2 2026. added: Q3 2026, and CRH expects it to stay weak in the near term. A fall in construction activity lowers volumes and prices. The Arcosa removed: purchase added: purchase, completed on October 23, 2026, adds about $8.5 billion of enterprise removed: value. Arcosa stockholders approved it on September 4, 2026, but it still needs regulatory approvals. added: value, paid mostly with new debt. If integration is slow or the $175 million of synergies does not come, CRH has more debt for less return. CRH buys many businesses each year. Paying too much or poor integration can lower returns on capital. Energy and labor costs are rising. added: The adjusted EBITDA margin fell to 23.5% in Q3 2026 from 24.3% a year earlier. If CRH cannot raise prices enough, margins removed: fall. added: fall more.
Balance sheet: Cash: removed: $3.0B added: $5.1B Debt: removed: $17.9B added: $19.6B Net debt: removed: $14.9B added: $14.5B Interest cover: removed: 4.8× added: 6.2× Debt due within 12 months: removed: $2.5B added: $4.8B Last debt due: 2056 CRH funds itself mostly with long-dated senior notes and keeps an investment grade rating. Total short and long-term debt was removed: $17.9 added: $19.6 billion at removed: June added: September 30, 2026, and cash was removed: $3.03 added: $5.11 billion, so debt less cash was $14.5 billion. removed: Net debt, which added: CRH's own net debt figure also includes finance leases and derivatives, added: and was removed: $15.4 added: $15.0 billion. Debt of removed: $2.52 added: $4.82 billion was due within 12 removed: months. For added: months, including $2.38 billion of commercial paper and $121 million of bank overdrafts. These figures are before the Arcosa removed: purchase, added: purchase. CRH removed: signed added: completed it on October 23, 2026 with a removed: $5.75 billion bridge facility in June 2026, which fell to $3.25 billion after a $2.5 billion three-year term removed: loan in July 2026. CRH expects pro forma added: loan, a $3.3 billion bridge facility and cash, so net debt removed: to adjusted EBITDA of 2.4 times for 2026 added: rose after the removed: purchase. added: balance sheet date. The €3.5 billion revolving credit facility matures in May 2030. Interest cover is operating income divided by interest expense for the first removed: half added: nine months of removed: 2026, which includes added: 2026. CRH says that it expects to keep a strong investment grade credit rating, and it announced a share buyback of up to $6 billion to the removed: seasonally weak first quarter. added: end of 2030. As of removed: Jun added: Sep 30, 2026.
Checkpoints: Oct removed: 30, 2026 (estimate): added: 23, 2026: Arcosa purchase closes. Passed. Watch: The deal closes in Q1 2027 on the agreed terms and leverage stays near 2.4 times pass; a delay, new conditions or a rating downgrade fail. Outcome: The deal closed on October 23, 2026, earlier than planned, on the agreed terms, and CRH said that it expects to keep a strong investment grade rating. Oct 29, 2026: Q3 2026 earnings: guidance. removed: Pending. added: Failed. Watch: 2026 guidance for adjusted EBITDA of $8.1 billion to $8.5 billion kept or raised pass; a guidance cut fails. removed: Q1 added: Outcome: CRH cut its 2026 adjusted EBITDA guidance to $7.8 billion to $8.0 billion, although the new guidance includes Arcosa. Jan 29, 2027 (estimate): removed: Arcosa purchase closes. added: FY 2026 results and 2027 guidance. Pending. Watch: removed: The deal closes in Q1 2027 removed: on the agreed terms added: guidance for growth in adjusted EBITDA with Arcosa and added: lower leverage removed: stays near 2.4 times pass; removed: a delay, new conditions added: guidance for flat or removed: a rating downgrade fail. added: lower adjusted EBITDA fails.
Recent events: added: Oct 29, 2026: CRH reported Q3 2026 results. Total revenues rose 3% to $11.4 billion, adjusted EBITDA was flat at $2.7 billion, and net income fell 22% to $1.2 billion, mainly because of a $178 million impairment in the Philippines. CRH cut its 2026 guidance to net income of $3.1 billion to $3.3 billion and adjusted EBITDA of $7.8 billion to $8.0 billion, from $3.9 billion to $4.1 billion and $8.1 billion to $8.5 billion. It gave cost inflation and a weaker residential market as reasons, and the new guidance includes Arcosa. The board approved a new share buyback of up to $6 billion to the end of 2030. Oct 29, 2026: CRH started Velocity, a two-year program to simplify its operating model. It expects yearly run-rate benefits of about $400 million by the end of 2028 and one-time costs of about $400 million. Oct 23, 2026: CRH completed the purchase of Arcosa for an enterprise value of about $8.5 billion, earlier than the Q1 2027 date that it expected. It paid with a $2.5 billion term loan, a $3.3 billion bridge facility and cash. Sep 4, 2026: Arcosa stockholders approved the purchase by CRH at a special meeting. About 99.8% of the votes cast were for the deal. The deal still needs regulatory approvals, and CRH and Arcosa expect it to close in Q1 2027. Jul 30, 2026: CRH reported Q2 2026 results. Total revenues rose 6% to $10.8 billion, net income rose 13% to $1.5 billion, and adjusted EBITDA rose 7% to $2.6 billion. CRH sold three non-core businesses for about $1.9 billion in total and bought Axius Water for $0.7 billion. It reaffirmed its 2026 guidance and raised the quarterly dividend 5% to $0.39. Jul 17, 2026: CRH signed a three-year $2.5 billion term loan facility for the Arcosa purchase, which reduced the commitments under its bridge facility to $3.25 billion. Jun 22, 2026: CRH agreed to buy Arcosa for $150 per share in cash, an enterprise value of about $8.5 billion, or 11.5 times 2026 estimated adjusted EBITDA including $175 million of expected cost synergies. CRH expects the deal to close in Q1 2027, subject to Arcosa stockholder and regulatory approvals, and expects pro forma net debt to adjusted EBITDA of 2.4 times for 2026. May 11, 2026: CRH appointed Aylwyn Bryan as Chief Financial Officer, effective May 12, 2026. He replaced Nancy Buese, who stepped down by mutual agreement.