When Should You Buy CRH plc (LON:CRH)?

Let's talk about the popular CRH plc (LON:CRH). The company's shares received a lot of attention from a substantial price increase on the LSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on CRH’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for CRH

What's The Opportunity In CRH?

Great news for investors – CRH is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is £53.38, but it is currently trading at UK£36.77 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, CRH’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of CRH look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for CRH, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since CRH is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CRH for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CRH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for CRH you should be aware of.

If you are no longer interested in CRH, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.