BZU: European Construction Cycle Stabilization Will Balance Sector Risks Ahead

The analyst consensus price target for Buzzi has increased modestly from EUR 47.65 to EUR 48.11. This reflects analysts' expectations for stabilized construction demand and slightly improved margins, despite ongoing sector risks.

Analyst Commentary

• Bullish analysts see continued outperformance in the heavy-side segment of the European building materials industry, with positive regulatory catalysts supporting cement pricing.
• Recent upgrades reflect optimism about Buzzi's ability to benefit from a stabilizing construction cycle in Europe and intact long-term market drivers, despite some near-term uncertainties.
• Valuation remains attractive relative to peers. Upward revisions to price targets signal underlying confidence in margin improvements and growth potential.
• Exposure to the German market is seen as a competitive advantage for Buzzi in the current macroeconomic context.

• Bearish analysts are cautious regarding upcoming regulatory changes, such as the removal of CO2 allowances, which are expected to limit further upside in the shares.
• Short-term risks in the U.S. market and ongoing European cost pressures could weigh on earnings momentum and execution consistency.
• Concerns remain about potential downside to free cash flow generation if Buzzi proceeds with larger capital expenditure projects in the near to medium term.
• Recent target reductions and downgrades highlight uncertainty around the sustainability of margin improvements and sector demand.

Valuation Changes

• Consensus analyst price target has risen slightly, from €47.65 to €48.11.
• The discount rate has increased modestly, moving from 10.35% to 10.56%.
• Revenue growth assumptions have edged up from 3.47% to 3.56%.
• Net profit margin is now expected at 18.21%, up marginally from 18.18%.
• Future P/E has moved higher from 12.81x to 12.95x.