FY19 operating earnings (EBITDA) were in line with expectations. UBS is more confident in the revenue outlook as the company is growing in line with expectations in the US.
Still, the broker suspects the market is wary of the risk of a de-stocking event, given one of the company’s wholesalers has introduced a competing private label.
UBS is comforted by the fact that end users such as plumbers have been naturally hesitant to switch away from familiar products. Outside of the US revenue is weak. Neutral rating maintained. Target is reduced to $3.66 from $3.75.
Sector: Capital Goods.
Target price is $3.66.Current Price is $3.51. Difference: $0.15 – (brackets indicate current price is over target). If RWC meets the UBS target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
