TRG | The Bottom Line – 6/9

The week started off with TRG initiating coverage of CRH, plc (CRH), a company benefiting from several key secular trends, including 1) reshoring/near shoring; 2) structural U.S. population shift to “smile states”; 3) meaningful increased investment in environmental matters; and 4) passage of significant U.S. and state funding initiatives supporting a 5+ year runway for infrastructure and private construction projects. CRH is a leading provider of building materials, building products and services focused on end-to-end solutions for infrastructure, non-res and residential end markets. With ~75% of EBITDA focused on the America’s market, TRG views CRH as a sleeping giant in the U.S. market. CRH’s top two states are the hottest growth markets in the U.S. – TX and FL. Moreover, we believe investors likely have not fully appreciated CRH’s robust and growing building products portfolio (competing against the likes of TREX to providing outdoor solutions like SITE and POOL). Finally, with the sizable backlogs of mega projects driving construction in the U.S. market, CRH’s end to end solutions allow the company to grab a bigger piece of the pie. Following our Monday initiation, CRH on Thursday held a general meeting to vote on shifting primary listing to the U.S., with results of the vote approving the move (95%+ approval). We believe part of CRH’s undervaluation is due to the international listing with minimal U.S. analyst coverage (TRG is the first U.S. analyst firm to cover CRH). As the company noted: “We believe a U.S. primary listing will bring increased commercial, operational and acquisition opportunities for our business, further accelerating our successful integrated solutions strategy and delivering even higher levels of profitability, returns and cash for our shareholders.”