Publication date: March 27, 2024

A tremendous amount of construction has been going on for some time. We see it happening all around us. Construction companies' order books are packed, and there is a great need for skilled workers. This development is directly reflected in the share price development of the well-known builders in the Netherlands. BAM's share price will double by 2024, and Heijmans' share price will triple by 2024!

Today, we will discuss the opportunities offered by Royal BAM Group, the largest construction company in the Netherlands, which recently secured a place in the Amsterdam MidCap Index.

Brief introduction:

Royal BAM Group was officially founded on May 12, 1869. The name BAM originally stood for "Bataafsche Aanneming Maatschappij," a name adopted in 1927 as the company evolved into a larger contractor. Since 1971, the company has been publicly traded.

In 2002, BAM merged with HBG (Hollandsche Beton Groep) and grew into one of the largest construction companies in Europe. Followed in 2003 by obtaining the designation "Royal" and has since been called Royal BAM Group nv. Today, BAM employs approximately 13,000 people internationally and achieves a turnover of €6.6 billion. Incidentally, VolkerWessels closely follows BAM in size.

What is the current situation at BAM:

In February, the company reported an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of €333 million for 2024, with a margin of 5.2%. In addition, the company announced a share buyback program worth €50 million.

As of March 21, BAM was included in the AMX index of Euronext Amsterdam, further strengthening the company's market position. In March 2025, BAM started the first phase of the renewal of the bus station at Schiphol Plaza, a project that will continue in the coming years. BAM is also active in the large-scale Zuidasdok project in Amsterdam.

In terms of sustainability, this year, BAM received recognition for its efforts by being included for the sixth consecutive year in the 'A list' of CDP, a leading global non-profit organization in the field of sustainability.

In summary, BAM is in a period of both financial growth and active involvement in key projects and sustainability while paying attention to internal safety issues.

Positive share price development in 2024

Royal BAM Group's share price has risen sharply since 2024 due to a combination of positive developments:

- Improved financial performance: As reported, BAM achieved adjusted EBITDA of €333 million with a margin of 5.2%.

-Share buyback program: BAM announced a share buyback program of €50 million, underlining confidence in its own financial health and future prospects.

- Strong order book: The order book grew 33% to €13 billion, indicating solid future sales and reinforcing investor confidence.

- Positive market expectations: Analysts expect EBITDA within the strategic range of 4-6% for 2024, indicating improved profitability.

These factors collectively contributed to increased investor confidence and the rise in BAM's share price since 2024.


What is the expectation for BAM's share price?

Analysts consulted are unanimously positive and have an average price target of €6.05 within a year.

Our expectation is also positive, and we even have a multi-year price target of €6.95. But as you may know, price movements never go in a straight line. Below is BAM's price chart with the most likely scenario.

The chart from mid-2014 shows the rise after the sharp decline during COVID-19. The current upward trend started then and has gained tremendous momentum by 2024. Currently, BAM is fluctuating around €5.35, and there is still a short-term stretch in the price to around €5.85. (+10%) From that level, we can expect a larger correction that could lead to a share price of around €4.55 and then round off the nice trend at a share price of around €6.95.


Conclusion:

BAM is a stable investment and has had the wind in its sails since the end of 2023. With that, it has the finest share price gain behind it by nearly doubling in 2024. Yet there is the prospect of the next opportunity by waiting out the correction. Around €4.55, the opportunity arises at favorable levels to consider expanding the portfolio with a successful Dutch construction company. The potential is currently set for a rise to € 6.95, which means a price gain of 55%.

For the short term, there is also a consideration to buy. BAM has momentum and, according to our model, can continue to rise about 10% to around €5.85. This is only to be considered for short-term investors.

BAM will publish its first-quarter figures on May 8, 2025.

Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are, therefore, for educational purposes only.