Reliance Worldwide Corp’s September quarter sales growth was ahead of expectations. Management suggests a limited upside to margins in the near term with S&GA normalising and reversing of tailwinds of copper and FX.
The company is targeting long term growth of 3-5% in the US and 2-6% in EMEA, in line with UBS’s estimates. Near term, Reliance Worldwide is wary of expecting any sustained benefit, expecting a normalisation of spending away from plumbing to follow as cities reopen.
Reliance Worldwide Corp retains its Neutral rating with the target price increasing to $4.10 from $3.85.
Sector: Capital Goods.
Target price is $4.10.Current Price is $4.11. Difference: ($0.01) – (brackets indicate current price is over target). If RWC meets the UBS target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
