Goodbody Stockbrokers says CRH shares could rise as high as €18 over the next 12 months. In a new report, Goodbody analyst Mr Robert Eason recommends the stock to investors, saying its price target was being made using conservative valuations.

The Irish-based building materials group has suffered over the past 18 months as weak construction markets, asbestos claims and the effect of currency movements knocked the share price. CRH is currently trading at around €15, some 50 per cent off its all-time high.

The stock has traditionally attracted a premium to its peers in the buildings materials sector but this has vanished in recent times.

Over the past 10 years, CRH has increased its earnings by a factor of 10 to €994 million. Acquisitions contributed 70 per cent of this increase with the remaining 23 per cent coming from organic growth. Currency effects have also made a significant contribution.

Mr Eason says the disappearance of the latter two drivers over the past couple of years had placed increased importance on the need for the company to grow. "We believe it is CRH's ability to undertake acquisitions which gives the company a clear advantage over its international peers," the report states.

It suggests the firm could spend up to €2.5 billion if the opportunity to make an acquisition arose.