What does the CRH plc (ISE:CRG) share price indicate?
Let’s talk about the popular CRH plc (ISE:CRG). Shares of the company have received a lot of attention due to a substantial price movement on the ISE over the past few months, rising to €48.03 at one point and falling as low as €34.78. . Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to answer is whether CRH’s current price of €36.28 reflects the real value of large caps? Or is it currently undervalued, giving us the opportunity to buy? Let’s examine CRH’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for CRH
What is the CRH worth?
According to my multiple price model, which compares the company’s price-earnings ratio to the industry average, the stock price seems justified. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find that CRH’s ratio of 11.76x is trading slightly above its industry peers’ ratio of 11.69x, which means that if you buy CRH today you will pay a relatively reasonable price for that. And if you think CRH should trade at this level for the long term, then there should only be a fairly intangible downside compared to other industry peers. Also, it seems that CRH’s stock price is quite stable, which means that there may be less chance of buying low in the future now that its price is similar to that of their industry peers. This is because the stock is less volatile than the broader market given its low beta.
Can we expect CRH to grow?
Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With expected double-digit earnings growth of 16% over the next two years, the outlook is positive for CRH. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What does this mean to you :
Are you a shareholder? It looks like the market has already priced in the positive outlook for CRG, with stocks trading around sector price multiples. However, there are also other important factors that we haven’t considered today, such as the background of its management team. Have these factors changed since the last time you consulted CRG? Will you be confident enough to invest in the company if the price drops below the industry PE ratio?
Are you a potential investor? If you’ve been keeping an eye on CRG, now might not be the most optimal time to buy, given that it’s trading around industry price multiples. However, the positive outlook is encouraging for CRG, which means that it is worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
In light of this, if you want to do more analysis on the company, it is essential to be aware of the risks involved. For example, we found 1 warning sign that you should scan your eye to get a better picture of CRH.
If you are no longer interested in CRH, you can use our free platform to view our list of over 50 other stocks with high growth potential.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.