Goldman Sachs has moved Holcim to a buy rating from neutral, saying the stock's recent weakness presents an opportunity to invest in what the bank described as "a multi-year growth story." The brokerage noted Holcim's share price has fallen 11% year-to-date versus a 1% decline for the SMI, and has dropped 17% since Goldman shifted to neutral on Jan. 22, creating the basis for its renewed positive stance.
Alongside the upgrade, Goldman lifted its 12-month price target to CHF 82 from CHF 77, which implies about 17.2% upside from Holcim's last closing price of CHF 69.98. The bank's revision comes with updated profit forecasts and valuation work that underpin its recommendation.
Holcim, the Swiss building materials group, has a market capitalisation of SFr38.8 billion and an enterprise value of SFr42.6 billion. Goldman increased its earnings per share forecasts for FY26, FY27 and FY28 by 4%, 0% and 6% respectively. The firm now expects FY26 EPS of SFr3.75, FY27 of SFr4.09 and FY28 of SFr4.63.
Goldman cited several drivers behind the EPS adjustments. These include Holcim's 50.01% acquisition of Pacasmayo, modest Swiss franc foreign exchange upgrades, and stronger industry pricing that offset some cost inflation. The bank also highlighted greater policy clarity following the EU Summit on the EU Emissions Trading System as reducing what it termed "left tail risk" for the equity.
On operations and margin dynamics, Goldman pointed to Holcim's European clinker target of 66% by 2030. That target sits below Cement Europe’s approximate 75% industry average and is projected to deliver a margin advantage of more than 200 basis points in European cement EBITDA by 2030, with the magnitude dependent on CO2 pricing.
Goldman also flagged Holcim’s Carbon Capture, Utilisation and Storage pipeline. It noted that 55% of the pipeline - four of seven projects - are located in EU low-income countries, which the bank says places Holcim to benefit disproportionately from the EU’s stated intention to allocate €30 billion in new industrial decarbonisation funding. The EU Council summit discussion of directing funds toward lower-income countries was cited as supporting that positioning.
On cost exposure, the brokerage described Holcim as "the least sensitive name" in its coverage to recent inflation. It referred to energy and transport-exposed cost buckets representing 7% and 11% of sales respectively, set against an 18% EBIT margin. Goldman also expects FY26 and FY27 earnings to benefit from a rightsizing of the corporate cost base following the Amrize spin-off.
In a peer comparison, Goldman projected a group like-for-like EBIT compound annual growth rate of 9% from FY25 to FY28 for Holcim, versus 8% for Heidelberg Materials and flat growth for Buzzi. The bank’s CHF 82 target reflects a 50/50 weighting between two valuation approaches: a discounted cash flow valuation of CHF 79 per share - using a 7.1% weighted average cost of capital and a 1% terminal growth rate - and a price-to-earnings valuation of CHF 84 per share, based on a 20x multiple applied to a weighted average of 75% FY27 and 25% FY28 EPS.
Goldman also highlighted Holcim's free cash flow credentials, noting the company has converted free cash flow to recurring net income at more than 100% over the past five years. For the first quarter of 2026, ahead of Holcim’s April 24 results, Goldman forecasts like-for-like EBIT of CHF 417 million, implying 6% growth and in line with a CHF 415 million Visible Alpha consensus.
Full-year FY26 free cash flow on Holcim’s company definition is projected by Goldman at CHF 2.14 billion, compared with Holcim’s own approximately CHF 2 billion target.
Key points
- Goldman upgraded Holcim to buy and raised its 12-month target to CHF 82, implying roughly 17.2% upside from the CHF 69.98 closing price.
- The bank increased FY26 and FY28 EPS estimates and highlighted structural advantages from clinker positioning and a decarbonisation project pipeline in lower-income EU countries.
- Sectors impacted include building materials, industrial decarbonisation projects, and European construction markets, with implications for equity investors in related peers.
Risks and uncertainties
- CO2 pricing - the expected margin advantage from lower clinker usage is dependent on future CO2 prices, introducing uncertainty for European cement EBITDA outcomes.
- Cost inflation - while Goldman factors in pricing and FX offsets, ongoing cost inflation could weigh on margins, affecting building materials and construction sectors.
- Policy and funding allocation - although the EU Summit reduced some policy risk, the flow of the proposed €30 billion decarbonisation funding and the targeting toward lower-income countries remain contingent on political decisions.
Outlook
Goldman's upgrade rests on a combination of recent share price weakness, operational positioning in clinker and decarbonisation, a meaningful Pacasmayo stake, and valuation metrics that support upside from current levels. The bank's forecasts and valuations provide a framework for its buy recommendation, while acknowledging exposures to CO2 pricing, cost inflation, and the pace of EU funding allocation.