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On Friday, Deutsche Bank (ETR:DBKGn)’s analysts revised the price target for RS Group Plc (RS1:LN) shares, lowering it to GBP7.60 from the previous GBP8.30, while maintaining a Hold rating on the stock. The adjustment follows RS Group’s latest financial performance update, which indicated some stabilization in the company’s revenue trends.
RS Group reported that like-for-like (LFL) revenues decreased by 2% in the fiscal year 2025, showing an improvement from a 3% decline in the first half (H1) to a 1% decline in the second half (H2). The company experienced a small revenue growth in the fourth quarter. The Europe, Middle East, and Africa (EMEA) region, which accounts for 61% of the company’s revenues, remained weak with a 3% decline and is expected to continue to impact results in the near term.
Despite the challenges in the EMEA region, RS Group saw a return to growth in the Asia Pacific region, which represents 8% of revenues, with a 1% increase in H2 of fiscal year 2025. The Americas region, accounting for 31% of revenues, also reported growth of 3%. However, uncertainties related to tariffs pose a risk to the company’s future performance.
RS Group primarily sources its US product offerings within the region, which are subject to tariffs. However, about 70% of its products originate from outside the region, with approximately 30% coming from Europe, 15% from China, 15% from Mexico, and 10% from other areas. The outcome of ongoing tariff negotiations is therefore crucial for RS Group, as it will influence the company’s competitive position and potential secondary risks.
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