(Bloomberg) — Amrize Ltd.’s shares fell in Switzerland following the North American cement-maker’s split from Holcim Ltd., sinking even as its former owner’s stock price climbed.
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Shares in the US cement unit closed down 15% from the reference price at 39.31 Swiss francs ($48.35) apiece in Zurich, while Holcim’s Swiss shares closed 14% above their respective reference price at 54.3 Swiss francs each. Holcim shareholders were given one Amrize share for each one they held in the firm. Amrize’s US shares closed at $51.99 on Monday in New York.
The divergence between shares of Holcim and the spinoff comes as Amrize faces challenges including a subdued construction market in the US and scrutiny on its spinoff price, versus a better outlook for the remaining company, according to an analyst.
Vontobel’s Mark Diethelm launched coverage of Amrize with a hold rating on Monday before trading began, saying the spinoff price for shares is close to his price target — leaving little room for upside. The closing price in Zurich gave Amrize a market capitalization of around 22.3 billion Swiss francs.
The analyst sees the US construction market as “challenging” in the near-term and expects the stock to be volatile.
Meanwhile, Diethelm says Holcim’s an attractive investment option after the split given it has “both a growth and a profitability expansion story.” He kept a buy rating on the company.
Read: Can Holcim’s US Spinoff Cement a Higher Valuation?: ECM Watch
Amrize is the largest cement provider in the US and Canada as measured by sales and production volume, according to a letter to shareholders earlier this month. It has more than 1,000 sites and 19,000 employees across North America and in 2024 it generated $11.7 billion in revenue — a 13% compound annual growth rate from 2021, according to a statement on Monday.
Though RBC analyst Anthony Codling sees attractive growth prospects in the company’s markets, he said it’ll take time for it to become known to US investors. And some existing Holcim shareholders will sell their Amrize stakes because the companies have different value propositions, with the spinoff offering strong growth as opposed to cash return, he said.
“We have some investors who knew they wanted to sell, but the majority do not yet know that they might want to buy,” Codling said.
Jan Jenisch, who is both Amrize’s chief executive officer and chairman, said last year that his own valuation for the spun-off unit was around $50 billion, although a lot has changed since then. Bloomberg Intelligence analysts including Sonia Baldeira wrote that Amrize’s pricing in its debut was in line with their expectations, with the opening level in Switzerland corresponding to an enterprise value of $36.7 billion.
