Amrize Ltd (AMRZ) Gets Overweight Nod and $62 Price Target from Morgan Stanley
Summary
Morgan Stanley has initiated coverage on Amrize Ltd (AMRZ) with an "Overweight" rating and a $62 price target, citing the company's aggressive bolt-on acquisition strategy and robust free cash flow generation. Key highlights include a 13% revenue CAGR and 16% EBITDA CAGR since 2021, driven by 17 strategic acquisitions, and a projected $7.5 billion in cumulative free cash flow (2025-2028). Amrize's strong financial flexibility with sub-1x Net Debt/EBITDA positions it well for future growth and potential larger acquisitions, justifying Morgan Stanley's bullish outlook.
Amrize Ltd (AMRZ) Receives Overweight Rating and $62 Price Target from Morgan Stanley
NEW YORK, NY – June 24, 2025 – Morgan Stanley has initiated coverage on Amrize Ltd (OTCBB: AMRZ), assigning an "Overweight" rating and a robust price target of $62.00. The investment bank highlighted Amrize's aggressive bolt-on acquisition strategy and strong free cash flow generation as key drivers for its optimistic outlook.
Key Investment Highlights Supporting Morgan Stanley's Thesis
Amrize's financial performance and strategic positioning underpin Morgan Stanley's positive assessment:
- Impressive Growth Trajectory: Since 2021, Amrize has demonstrated significant growth, achieving a 13% Compound Annual Growth Rate (CAGR) in revenue and a 16% CAGR in EBITDA. This growth has been largely propelled by 17 strategic acquisitions, showcasing the effectiveness of its bolt-on strategy.
- Robust Free Cash Flow Generation: The company is projected to generate a substantial $7.5 billion in cumulative free cash flow between 2025 and 2028. This strong cash generation is expected to provide ample capital for future bolt-on acquisitions, fueling continued expansion.
- Healthy Financial Flexibility: Amrize maintains a conservative leverage profile, with current net debt to EBITDA below 1x. This low leverage provides significant financial flexibility, enabling the company to pursue growth opportunities without undue financial strain.
Market Position and Upside Potential
Amrize holds a significant position within its core markets, with potential for further upside:
- Leading Market Player: Amrize is recognized as the fifth-largest aggregates player in the U.S. and commands a 3% share in the residential roofing market, indicating a solid foundational presence.
- Conservative Growth Assumptions: Morgan Stanley's base case for Amrize assumes a conservative 2% annual growth from bolt-on acquisitions. This suggests that the current price target may not fully capture the potential for accelerated growth.
- Clear Upside Risk from Larger Acquisitions: The report identifies a "clear upside risk" if Amrize accelerates its scale through larger platform acquisitions. Such moves could significantly enhance its market position and financial performance beyond current projections.
Strategic Outlook and Investment Rationale
Amrize's strategic positioning, characterized by a sub-1x leverage profile and robust free cash generation, positions it favorably to fund continued acquisitions. This strategy is expected to drive EBITDA growth towards Morgan Stanley's projected 15% CAGR from 2025 to 2030, assuming a 1.5x leverage scenario. This projected growth rate significantly outpaces that of its peers, thereby justifying Morgan Stanley's "Overweight" stance.
Investors are encouraged to monitor Amrize's evolving growth metrics and capital structure to align with Morgan Stanley's bullish thesis. Tools like Financial Modeling Prep's (FMP) APIs can provide real-time data on financial growth statements, leverage, and profitability trends, such as Net Debt/EBITDA and EBITDA margin, to track the company's performance effectively.