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Kepler Cheuvreux initiated coverage on R&S Group Holding AG (SWX:RSGN) with a Hold rating and a price target of CHF28.00 on Wednesday.
The Switzerland-based industrial company, described as a "hidden champion" in the electrical transformer industry, offers comprehensive solutions ranging from small distribution to large power transformers through its multi-brand strategy. R&S Group has experienced rapid expansion in recent years, with its share price more than doubling since mid-2024.
The company benefits from increased investment in the transmission and distribution industry after years of underinvestment, according to Kepler Cheuvreux. This growth is driven by megatrends including decarbonization and grid decentralization, which have contributed to unprecedented organic growth and margin expansion for R&S Group.
Despite these positive factors, Kepler Cheuvreux expressed concerns about flattening earnings momentum, sustainability of pricing, and supply chain issues. The research firm also noted the company’s remarkably low share of recurring revenues, which stands below 5%.
R&S Group provides exposure to structural grid investments as a niche market leader in transformers, positioning the company to capitalize on ongoing infrastructure upgrades in the electrical grid sector.
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