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Investing.com - Barclays downgraded Rexel SA (EPA:RXL) (OTC:RXLSF) from Overweight to Equalweight on Thursday, setting a price target of EUR30.00.
The downgrade comes after Rexel shares outperformed the market, rising 10% relative to the SXNP index over the past three months, leading Barclays to conclude that the risk-reward profile for electrification, data center, and European construction recovery opportunities is more attractive elsewhere, specifically mentioning Legrand as an alternative.
Barclays noted that much of its previous Overweight thesis for Rexel has already materialized in the stock price, highlighting the lack of meaningful incremental pricing traction in the third quarter compared to the second quarter as evidence that customers have become less willing to accept electrical equipment at any price.
The research firm acknowledged that Rexel has demonstrated greater resilience than in previous periods of end market weakness, which has contributed to the stock’s recent outperformance.
Barclays indicated that for Rexel to achieve further re-rating, the company would need a combination of increased confidence in European construction recovery and more significant changes to its portfolio.
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