Reliance Worldwide: EMEA outlook is the most uncertain

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Alex Lu
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By Alex Lu
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Date posted:
30 October 2023, 7:00 AM
Sectors Covered:

  • Reliance Worldwide's (ASX:RWC) 1Q24 trading update overall was slightly weaker than expected, largely driven by tougher trading conditions in EMEA.
  • FY24 guidance has been reduced slightly, with management now expecting group sales to be down low to mid single digits (vs low single digits previously). Expectations for FY24 margins to be stable and weighted to 2H24 remain unchanged.
  • We decrease FY24-26F group EBITDA by 3%.
  • Our target price falls to (login to view) and we maintain our Hold rating. While we continue to think RWC is a good business, operating conditions in all regions are likely to remain soft in the near term with risk of further deterioration if global interest rates continue to track higher.

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