Sustainable Materials Expansion Will Secure Long Term Resilience

Key Takeaways

• Sustained demand in renovation, infrastructure, and sustainable materials, along with strategic acquisitions, supports revenue growth and offsets weakness in new residential construction.
  
• Cost optimization, digitalization, and scale efficiencies from M&A improve margins, while regulatory trends in energy efficiency boost demand and earnings resilience.
  
• Prolonged weakness in housing markets, higher input costs, and reliance on traditional materials threaten Wienerberger's profit margins, revenue growth, and investment capacity amidst currency headwinds.

Catalysts

Produces and sells clay blocks, facing bricks, roof tiles, and pavers in Europe West, Europe East, and North America.

• Wienerberger is benefiting from sustained demand in renovation and infrastructure segments-underpinned by urban population growth and the need for water management and housing upgrades-which is expected to provide multi-year revenue visibility and offset cyclical weakness in new residential construction.
  
• The company is actively expanding its portfolio in energy-efficient and sustainable building materials (e.g., through acquisitions like Terreal and solar supplier GSI), aiming to capture market share and support premium pricing, which should drive both revenue growth and net margin expansion.
  
• Wienerberger's ongoing cost optimization and digitalization initiatives-including production efficiency, logistics optimization, and potential workforce adjustments-are expected to mitigate persistent cost inflation and support operating margin improvement.
  
• An accretive M&A strategy, with bolt-on acquisitions in fragmented markets (as seen with recent deals in Ireland, Netherlands, and France), expands Wienerberger's scale and geographic reach, providing revenue and EBITDA growth levers through both cross-selling and integration synergies.
  
• The company's leading position in sustainable materials and readiness for regulatory tightening around energy efficiency and emissions standards favor incremental demand for its solutions, supporting long-term earnings resilience and margin protection.

Wienerberger Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Wienerberger's revenue will grow by 3.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from 4.0% today to 9.2% in 3 years time.
• Analysts expect earnings to reach €476.6 million (and earnings per share of €3.45) by about August 2028, up from €187.4 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.2x on those 2028 earnings, down from 18.8x today. This future PE is lower than the current PE for the GB Basic Materials industry at 19.4x.
• Analysts expect the number of shares outstanding to decline by 0.76% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.37%, as per the Simply Wall St company report.

Wienerberger Future Earnings Per Share Growth

Risks

• Persistent high mortgage rates and weak new residential housing demand in key markets like the U.S. and Germany are leading to lower sales volumes for Wienerberger's core products, which could cause continued revenue pressure if these trends remain unchanged.
  
• Rising energy and personnel costs, especially through 2025 and 2026, are expected to remain at elevated levels due to existing forward contracts and inflation-linked agreements, potentially compressing net margins if cost increases cannot be fully offset by price hikes.
  
• The company's ongoing exposure to traditional building materials (like bricks and clay blocks), which are particularly vulnerable to market downturns in new residential construction, risks topline weakness as secular shifts favor more innovative or sustainable construction materials, impacting long-term revenue growth.
  
• Increased capital expenditure requirements (growth and maintenance CapEx totaling nearly €300 million) combined with volatile working capital and seasonal negative free cash flow could constrain earnings growth and restrict funds available for future investments.
  
• Currency headwinds, particularly the weakening U.S. dollar, are eroding earnings contributions from North America, and further volatility could negatively impact group EBITDA and reported earnings.

Valuation

• The analysts have a consensus price target of €37.083 for Wienerberger based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €40.0, and the most bearish reporting a price target of just €33.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €5.2 billion, earnings will come to €476.6 million, and it would be trading on a PE ratio of 10.2x, assuming you use a discount rate of 7.4%.
  
• Given the current share price of €32.22, the analyst price target of €37.08 is 13.1% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.