Morgan Stanley cuts Lafarge rating to "equal-weight"

Morgan Stanley cuts Lafarge rating to "equal-weight"
Published: 28 January 2011

Morgan Stanley has downgraded its rating on Lafarge to "equal-weight" from "overweight", although it raised its share price target to EUR 53 from EUR 50.40.

The broker highlighted some negative factors affecting the company, namely strong exposure to emerging markets, more intense competition on some local markets and higher growth in costs.

Morgan Stanley noted that last year Lafarge generated 53% of its operating profit from African and Asian operations. However, the broker also said the cement maker faces uncertainty due to internal problems in countries like Algeria, South Korea and Egypt.

Morgan Stanley concluded that the way investors view stocks of cement companies may improve if developed markets recover more rapidly than expected.