News

CRH plc CRH has signed a deal with Caterpillar Inc. CAT to advance the deployment of the latter’s zero-exhaust emissions solutions.

CRH, a leading aggregates producer in North America, has become the first company in the industry to sign such an agreement with Caterpillar. The agreement will boost the deployment of Caterpillar's 70- to 100-ton-class battery electric off-highway trucks and charging solutions at a CRH site in North America.

This apart, CRH will participate in CAT’s Early Learner program for battery electric off-highway trucks, testing and validating the units in real-world applications. It will also address safety, performance, operational and compliance requirements for the aggregates industrial customers.

Scott Parson, president of CRH’s Americas Materials Solutions, said, "Through this partnership with Caterpillar, we will advance the use of sustainable equipment in our operations and build on our shared commitment to a low-carbon future."

The alliance will also help CRH's objective of reducing greenhouse gas emissions from its operations by utilizing more sustainable equipment. It has set a target to deliver a 30% reduction in absolute carbon emissions by 2030 (from 2021) and an ambition to be a net-zero business by 2050.

The stock inched up 3% on Jan 8 after the news release.

Strategic Initiatives Bode Well

CRH intently focuses on expanding its geographical footprint and product portfolio through strategic acquisitions. The company primarily utilizes several opportunities to expand its product offerings in various fields, comprising its solutions capabilities and road infrastructure, utility infrastructure and outdoor living. It completed 16 strategic bolt-on acquisitions in the first nine months of 2023 for an investment of approximately $700 million.

CRH’s Outdoor Living Solutions business is immensely benefiting from Barrette Outdoor Living's contribution, which the company acquired in July 2022 for an enterprise value of $1.9 billion. Also, resilient residential demand from both retail and professional customers, accompanied by good pricing momentum, is aiding the uptrend. For 2023, it expected to invest $1.8 billion in capital expenditure to spark further growth of its existing businesses.

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This Zacks Rank #2 (Buy) stock surged 56% in the past year, outperforming the Zacks Building Products - Miscellaneous industry’s 44.7% growth. Its earnings estimate for 2024 reflects 43.1% year-over-year growth. It has a VGM Score of B.

About CAT

CAT’s revenues and earnings have been growing for 11 straight quarters year over year, owing to its cost-saving actions, solid end-market demand and pricing actions. It ended the third quarter of 2023 with an impressive backlog of $28.1 billion, which will support the company’s top line in the upcoming quarters.

Caterpillar is anticipated to gain from strength in residential construction and non-residential construction in the United States. Its funding initiatives are focused on areas of expanded offerings and services and digital initiatives like e-commerce, sustainability and electrification that drive its long-term growth. The company currently carries a Zacks Rank #3 (Hold).

Known for its iconic yellow machines, Caterpillar is the largest global construction and mining equipment manufacturer. The Zacks Consensus Estimate for CAT’s 2023 earnings indicates year-over-year growth of 48.6%. The firm has a trailing four-quarter earnings surprise of 16.6%, on average.

Other Key Picks

Other top-ranked stocks in the Zacks Construction sector are:

Gibraltar Industries, Inc. ROCK has also been riding on the back of solid demand for infrastructure services throughout end markets in both private and public sectors. ROCK, currently carrying a Zacks Rank #2, has gained 70.8% in the past year. The 2024 EPS estimate has increased to $4.63 from $4.51 over the past 60 days.

Earnings for 2024 are expected to grow 12.1%. ROCK’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 14.8%. It currently carries a VGM Score of A.

Armstrong World Industries AWI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have gained 36.1% in the past six months. The Zacks Consensus Estimate for AWI’s 2023 sales and EPS indicates growth of 4.7% and 8.2%, respectively, from the previous year’s reported levels. AWI delivered a trailing four-quarter earnings surprise of 7.9%, on average.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.