(CercleFinance.com) – Berenberg announced on Monday that it had raised its price target on Rexel from 25 to 27 euros while maintaining its buy recommendation on the title of the distributor of electrical equipment.
In a research note, the financial intermediary points out that with a PER of 9x for a return on free cash flow (FCF) of more than 10%, the action is trading at all-time lows despite a share price which has more than doubled in three years.
Berenberg points out, however, that the manufacturers of the products that Rexel markets – namely Schneider, Legrand or Rockwell – are all evolving at levels close to, or even above, their historical highs, a phenomenon that he considers moreover perfectly justified.
The analyst deduces from this that a catch-up effect is likely to begin at the level of Rexel’s valuation multiples, an element which he believes could be the cause of a revaluation movement of the share.
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