Investing.com -- Holcim (SIX: HOLN ) has been downgraded to “neutral” from “buy,” by Citi Research, as analysts conclude that the stock has largely priced in its sum-of-the-parts equity value.

Shares of the Swiss company were down 2.4% at 07:45% ET (11:45 GMT).

The target price has been revised to CHF 109, reflecting Citi’s latest valuation assessment. With shares trading at CHF 100.95 as of March 7,  further upside appears limited following a sustained rally in recent months.

The downgrade comes at a pivotal time for Holcim as it moves forward with its planned spin-off of its North American division, Amrize, which is expected to be completed in the first half of 2025.

This structural shift is set to reshape the company’s focus, with separate Capital Markets Day events scheduled for March 25 in New York City for Amrize and March 28 in Zurich for the remaining Holcim operations.

Financially, Holcim projects mid-single-digit revenue growth in local currency for the year, with Citi Research estimating a 4.5% increase in net sales.

Recurring EBIT is expected to outpace revenue growth, driving an EBIT margin expansion to 20.1%. Free cash flow is forecasted to exceed CHF 3.5 billion, with Citi’s projection at CHF 3.6 billion.

Growth is expected to be led by Latin America and the Asia, Middle East, and Africa region, while Europe is projected to contribute at a more moderate pace.

The North American business, which will form the core of Amrize, is poised to benefit from infrastructure investments and the reshoring of manufacturing.

Sustainability initiatives remain central to Holcim’s long-term strategy, with a continued expansion of its EcoPact and EcoPlanet product lines.

Additionally, the company is repurposing underused clinker facilities in Europe to produce calcined clay and recycled demolition waste, reinforcing its commitment to low-carbon materials.

Citi Research’s valuation approach assigns Holcim a target price of CHF 109, based on its SoTP analysis.

The spin-off entity will comprise 100% of the North American division and 80% of the Solutions & Products segment, while the remaining Holcim operations will retain the European, Latin American, and AMEA divisions, along with 20% of the Solutions & Products business.

Holcim’s enterprise value stands at CHF 71.9 billion, with a net asset value of CHF 63.2 billion after accounting for debt and minority interests.