Morgan Stanley has started coverage on Amrize Ltd with an Overweight rating and a price target of $62, emphasizing their aggressive acquisition strategy and solid free cash flow prospects.

Key Highlights for Investors

• Strong Revenue Growth: The company has achieved a 13% CAGR in revenue and a 16% CAGR in EBITDA since 2021, driven by 17 strategic acquisitions.
• Robust Cash Flow Generation: Projected cumulative free cash flow is estimated at $7.5 billion between 2025 and 2028, facilitating future acquisitions.
• Strong Financial Position: With a net debt to EBITDA ratio of less than 1x, Amrize has considerable financial flexibility.

Market Position and Risks

• Market Share: Amrize is the 5th largest player in the U.S. aggregates space with a 3% share in residential roofing.
• Acquisition Strategy: Morgan Stanley’s base case assumes 2% annual growth driven by bolt-on acquisitions.
• Potential Upside: There is a clear upside if larger platform acquisitions accelerate growth.

Strategic Conclusion: With its low leverage profile and strong cash flow capabilities, Amrize is well-positioned for further acquisitions and EBITDA growth, justifying Morgan Stanley’s bullish Overweight stance.