Bernstein has upgraded Heidelberg Materials to 'outperform' from 'market-perform' with a €230 price target, representing 21% upside from the €190 closing price on Feb. 26. The brokerage argues the 20% stock decline over the past month has priced in excessive carbon price drops of roughly €65 per tonne, equivalent to about 80% of prices when regulatory concerns first surfaced.

The upgrade comes amid fears over potential changes to the European Union's Emissions Trading System, which Bernstein believes would require passage through the European Parliament and implementation by late 2027 or early 2028 at the earliest. The brokerage cut its 2026 earnings per share estimate to €12.09 from €12.83 and reduced its 2027 forecast to €13.60 from €15, citing weaker volume assumptions and a roughly 3% foreign exchange headwind.

Bernstein calculates approximately €10 billion in excess headroom under Heidelberg's current capital plan through 2030, with net debt expected to fall from 1.2 times EBITDA in 2025 to 0.1 times by 2030. The brokerage notes the stock trades at 15.7 times 2026 earnings and 14 times 2027 earnings, below its target-implied multiples of 19.0 times and 16.9 times.