Shares in HeidelbergCement AG have been downgraded to ’sell’ from ’reduce’ at Dresdner Kleinwort Wasserstein following a strong share price performance, dealers said.

Dresdner said HeidelbergCement shares have risen 29 per cent in the past three months due to expectations of a stellar 2005 performance and speculation that Spohn Cement could look to buy out the remaining shareholders at a higher price than the previous offer of EUR 60 per share.

The broker expects 2005 should end on a high note following strong nine months results driven by the US boom and the emerging markets in Central and Eastern Europe and the Middle East.

However, Dresdner thinks HeidelbergCement looks expensive trading with a PE of 17.7 times and 16.4 times for 2006 and 2007, and an EV/EBITDA ratio of 9 times and 8.6 times respectively and recommends investors lock in profits at these levels.

Finally, Dresdner lifts the target price to EUR 60 from EUR 54 on an upward re-rating of the sector.