Berenberg cuts Amrize stock rating on roofing division concerns

Berenberg has lowered its rating for Amrize Ltd (NYSE:AMRZ) to Hold from Buy and reduced its price target to $46.00 from $48.00. Currently, the stock is trading at $41.87, which is below both the new target and the firm's Fair Value assessment. This downgrade comes after Berenberg estimated average earnings per share forecasts for 2027-28 to be 5% lower than previously projected.

The firm's decision to downgrade is primarily due to limited upside potential from the new price target and ongoing volume and margin concerns within Amrize's roofing division, known as Building Envelope. Despite the challenges faced in 2026, Berenberg anticipates a stronger performance in 2027, with EBITDA growth expected. While the company's valuation appears attractive on a sum-of-the-parts basis, Berenberg does not foresee the valuation gap narrowing in the near future.

The investment firm also noted that Amrize is trading at a high P/E ratio relative to near-term earnings growth, and while the management has been aggressively buying back shares, they see more promising opportunities elsewhere in the sector. Amrize's third-quarter 2026 earnings report showed slightly better-than-expected results, with adjusted earnings per share of $0.8682 compared to the consensus estimate of $0.8541.

However, revenue of $3.12 billion was lower than the anticipated $3.16 billion, with management attributing the discrepancy to weather conditions and inflationary pressures affecting volumes.