UBS notes, following a strong FY21 result, top line growth has started to moderate. Several factors suggest to the broker that Reliance Worldwide is unlikely to experience above-normal volume growth going forward.
Combined with declining margins this results in the broker’s forecast for net profit to decline -9% in FY22. After a strong share price performance UBS downgrades to Neutral from Buy. Target is reduced to $5.90 from $6.16.
Sector: Capital Goods.
Target price is $5.90.Current Price is $5.64. Difference: $0.26 – (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).
