Rexel: Goldman Sachs upgrades to 'buy' - raises target

(CercleFinance.com) - According to Goldman Sachs, the fears that have been weighing on share of the electrical equipment distributor Rexel are now priced in, with the share having lost 18% of its value in one month.

The broker has therefore upgraded its rating on the share, now recommending investors "buy" it, against a previous "neutral" rating. Alongside this upgrade, Goldman Sachs has raised its target price for the share from 10.4 euros to 12 euros.

Rexel is suffering from two major concerns investors believe. First, the consequences of a deterioration in economic conditions, and secondly, more "structural" matters, related to the "disruption" by the new digital giants in distribution.

However, at present, the broker's note says that the Rexel share already integrates these doubts, as it prices in a fall in margins and is heavily discounted relative to its sector. In addition, the reality of competing "digital" giants is hardly being seen in Rexel's case, Goldman Sachs says. Rexel finally seems to be able to cope with a deterioration in the economy, and that it benefits from barriers to entry that are stronger than those of peers.


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