RXLSF - Rexel S.A. Powered To Win But There Could Be Some Near-Term Static
2024-01-27 09:31:29 ET
Summary
- Rexel S.A. has continued to outperform the broader industrial space, helped by its leverage to the "electrify everything" theme.
- Concerns about the non-residential and residential construction markets in 2024 pose challenges for Rexel, as does a more challenging price/cost environment.
- Electrification, including EVs and automation, offer attractive multiyear growth tailwinds, and management is actively seeking to upgrade its higher-value service and product offerings.
- Weaker margins are a threat to sentiment in the near term, but the valuation and longer-term story make this a name to seriously consider on pullbacks.
Industrials have enjoyed a nice a rebound since late October lows, with investors more confident about a “soft landing” scenario for the United States and limited additional downside risk in Europe. Rexel S.A. (RXEEY) (RXLSF) (RXL.PA) has done even better, outperforming the S&P 500 and broader industrial space since my last update , helped not only by its leverage to the still-popular “electrify everything” theme, but also its company-specific leverage to ongoing drivers like growing market share, increased digitalization, and increased leverage to value-added offerings....
Rexel S.A. Powered To Win, But There Could Be Some Near-Term Static