How will the share repurchase affect CRH's earnings per share and valuation metrics in the short term?

Impact on EPS and valuation

Because the repurchased ordinary shares are cancelled, CRH’s share‑capital falls immediately. Assuming the company's net‑income for the quarter is unchanged, the earnings‑per‑share (EPS) will rise roughly in line with the percentage reduction in the share count. In most U.S.‑listed buy‑backs a 2‑3 % reduction in floats translates into a 2‑3 % uplift in EPS, which tightens the trailing P/E ratio even before the market adjusts the price. In the short run the stock’s market price usually reacts faster than the updated EPS figure is reflected in filings, so the combination of a higher EPS and a still‑old denominator can create a temporary ‘P/E compression’ – i.e. a more attractive valuation on a chart.

Market and technical dynamics

A buy‑back is a clear signal that management believes the shares are undervalued and that cash is available for capital return. The actual redemption via BNP Paribas in New York adds “green‑buy‑back” volume to the execution‑day market, often providing a price‑support floor and generating fresh bullish momentum. In CRH’s case the daily volume‑weighted average price (VWAP) used to fund the purchase will act as a new intra‑day reference point; if the price holds above the VWAP, the trade is likely to be perceived as a up‑side catalyst and could trigger a short‑term break of recent resistance (≈ $30‑$32 range on the NY‑listed ADR). A modest pull‑back into that area would offer a low‑risk entry with upside potential from both the EPS uplift and the continued buy‑back flow.

Actionable take‑away

• Short‑term view: Expect a modest price‑rise (3‑5 %) on the day of the redemption and in the following 1‑2 weeks as the market re‑prices the higher EPS and the tightened P/E.
  
• Trade idea: If the stock stalls below the VWAP used for the buy‑back, consider a buy‑the‑dip with a stop just under the VWAP; target the next technical swing high (≈ $34) or hold until the next earnings release to capture the full EPS benefit.
  
• Risk: The effect is limited to the size of the share‑reduction; a tiny float‑cut yields only a marginal EPS boost, so the upside is bounded and should be measured against the overall market tone for European infrastructure firms.