HeidelbergCement higher on Citigroup upgrade

HeidelbergCement higher on Citigroup upgrade
Published: 14 September 2011

Shares in German cement maker HeidelbergCement gain 0.5 per cent, as Citigroup upgrades its stance on the group to "buy" from "hold" in review of the European building materials sector.

Citigroup points to a valuation discount for HeidelbergCement compared with its peers as a reason for its upgrade.

HeidelbergCement trades at 8.6 times 12-month forward earnings, equity research firm StarMine shows, a discount to Holcim’s 14.4 times and Lafarge’s 9.3 times.

Citigroup downgrades its rating for Holcim, Italcementi , and Buzzi Unicem all to "sell" from "hold" in the review, having cut its estimates and target prices across the sector to account for reductions in its assumptions for overall construction output on the back its lower global GDP forecasts