UBS downgraded French cement group Lafarge to "neutral" from "buy", but raised its share price target to EUR 60 from EUR 57.
The changes in the rating have been prompted by a 30% rise in Lafarge’s share value since the beginning of July.
The broker expects further growth on emerging markets, which account for 64% of the company’s operating profit, thanks to the expansion of its capacity by 25 million tonnes by 2011.
On the other markets, the group’s business also shows signs of recovery after the 50% plunge in earnings before interest, tax, depreciation, and amortisation (EBITDA) there.
UBS has been reassured by the ongoing reduction of Lafarge’s debt after the sale of assets for EUR 750 million (USD 1.1bn).