$40.00
$75.00
bear $40.00
base $52.00
bull $75.00
margin of safety $30.00
market price* $37.82
WHAT THE BUSINESS IS. Amrize is the North American cement and building-materials business Holcim spun off in June 2025. It has two segments. Building Materials makes cement, aggregates (crushed stone, sand and gravel), ready-mix concrete and asphalt from a network of plants and quarries. Building Envelope sells commercial roofing and wall systems such as single-ply membranes and insulation, built largely through acquisitions including Duro-Last. In 2025 revenue was $11.8B: about $9.0B in the United States and $2.7B in Canada. No customer is significant. Cement and aggregates are heavy and cheap per ton, so they rarely travel far. A plant or quarry with permits competes mostly with a few nearby rivals, and new permits are hard to get. That local structure is the main thing protecting the business. EARNING POWER. We measure owner earnings as operating cash flow, with working-capital swings removed, less share-based pay and the capital spending needed to keep the business at its current size. The filings give three years. Owner earnings were $1,284M in 2023, $1,598M in 2024 and $1,538M in 2025, or $2.32, $2.89 and $2.78 per share on about 554 million diluted shares. Revenue barely moved ($11.68B, $11.70B, $11.82B), so almost all capital spending ($630M, $642M, $788M) counts as upkeep. That is close to depreciation, which supports the figure. Share-based pay is small ($14M in 2025). Interest paid was $504M, $497M and $411M. Before paying lenders, the business produced $1.79B, $2.10B and $1.95B. We use the $1.95B middle figure as the normal level. Three years is a short window, and 2023 and 2024 were carve-out years with costs allocated by Holcim. All three years were also good ones for North American construction. The record therefore does not show what this business earns in a downturn, and the downturn case below supplies that. Before-lender cash flow fell about 7% in 2025, partly from spin-off costs. The middle case starts year one at that same 7% decline and does not assume a rebound. The first half of 2026 shows revenue up about 7% ($5.68B vs $5.31B) and second-quarter net income up about 15%. That supports the higher case but does not move the starting level after only two quarters. DEBT. The company owes about $5.3B of senior notes at coupons of 3.5% to 7.65%, maturing from 2026 through 2046. It also has about $0.4B of finance leases and, at June 30, 2026, $0.7B of commercial paper. Cash is low at mid-year because the business builds receivables in the construction season and collects them by year-end. In the first half of 2026 it also spent $425M on acquisitions, $178M on buybacks and $304M on dividends. Allowing for that seasonal swing, we put net debt at about $4.8B, or roughly $8.70 per share. The notes cost roughly what we charge for money overall, so we make no adjustment for their rates. About $1.0B is due within a year, including the remaining 3.5% notes due 2026 and the 4.6% notes due 2027. At about $1.9B of cash flow before interest against roughly $0.3B of annual interest, refinancing looks routine. No covenant constrains the outcome. LOW CASE ($40 per share). Over ten years this business will almost certainly meet a construction downturn. This case uses the one the industry actually had in 2007-2011, when US cement consumption fell by roughly 40-45% from peak to trough and producers' cash flow fell further than volumes. Before-lender cash flow drops from about $1.89B in year one to about $0.76B at the trough in year four, about 40% of normal. It recovers over six years to about the normal level and never grows after that. Even at the trough, cash flow is more than double the interest bill, so the debt can be carried. The business is worth about $27.2B, less $4.8B of debt, or about $40 per share. MIDDLE CASE ($52 per share). Year one repeats 2025's 7% decline. A milder recession follows in years four to six, about as deep as 2001 or 2020, with cash flow 10-15% below trend for two years. In between, cash flow grows about 1% a year for twenty years and is then held flat. That 1% is credited to the long-demonstrated ability of cement and aggregates producers to raise prices, held well below inflation. It is not credited to volume, new markets or margin gains. The business is worth about $33.4B, less $4.8B of debt, or about $52 per share. HIGH CASE ($75 per share). The first-half 2026 improvement carries into a 3% gain in year one. The company keeps doing what it has visibly done, making small bolt-on purchases funded from its own cash and raising prices. Together these add 2.5% a year through year ten and 2% a year through year thirty, with a modest dip in years five and six. The business is worth about $46.2B, less $4.8B of debt, or about $75 per share. WHAT WE CREDITED AND LEFT OUT. We credited only modest price-driven growth in the middle case and bolt-on acquisition growth in the high case. Both are things the business has already done for years. We gave no credit to federal infrastructure spending, to data-center and reshoring construction demand, to management's margin targets, or to lower costs after separation. None of those is yet visible in the filings as a sustained result. Intangible amortisation from the roofing acquisitions is added back in owner earnings, and quarries are long-lived. As a result, wasting assets are not a material issue here. CHALLENGING THE CASE. The most likely error is the starting level itself. Three carve-out years from a strong construction market may overstate normal earnings. A business priced from 2023-2025 alone could be priced too high. To test it, we looked at cash flow against reported net income ($956M, $1,274M, $1,185M) plus depreciation. The two reconcile year by year with no unexplained gap, so the level is real for those years. Whether it is normal for a full cycle is unproven, and the low case is built to carry that risk. MARGIN-OF-SAFETY PRICE: $30. We are moderately sure of the earnings level. It is real cash, clearly reconciled, but it covers only three good years under a former parent. The worst plausible outcome is a deep housing and non-residential slump like 2008-2010, combined with costs from becoming a standalone company that turn out higher than Holcim's allocations. The business would survive that. Its debt is long-dated with no near-term wall, its customers are spread out, and its plants and permitted quarries are hard assets that cannot be copied. But owners would see several lean years and probably a dividend cut. If we are wrong about the normal level, and true mid-cycle cash flow is closer to 2023's $1.8B, and a downturn arrives early, the shares are worth roughly the high $30s. The price assumes a three-to-four-year holding period, and the dividend pays a few percent a year in the meantime. At $30, even an outcome near the low case implies a satisfactory return. If the middle case plays out over three to four years, it implies roughly 20% a year including dividends from that price. Above $30, reaching that return depends on avoiding the downturn that history says is likely.