Broker Cantor Fitzgerald came off a conference call with Germany's HeidelbergCement upbeat on the prospects of Breedon Aggregates (LON:BREE).
How does that work, I hear you ask? It is a thing the analysts refer to rather cryptically as ‘read-across’.
This simply means they have spied something in Heidelberg’s figures that will also impact Breedon’s performance.
Analyst Ian Osburn said the Germans highlighted the strength of the UK materials market in the call, with volumes up 7% and pricing by ahead 4%. At the same time energy costs have been falling.
The growth figures quoted don’t seem spectacular, but for companies feeding the UK construction sector, they are right up there.
In fact Osburn, whose earnings forecasts are at “the top end of consensus”, sees some wiggle room to edge those numbers higher.
The analysts does admit that trading at almost 24 times earnings, Breedon does appear fully valued.
“However this is well below the 32 times average of the last few years and we see scope for continued growth and transformational acquisitions to bring this to compelling levels,” he added.
At 9.05am, the stock was changing hands for 57.1p, valuing the business at £613mln.