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Investing.com - Rothschild Redburn upgraded RS Group Plc (LON:RS1) from Neutral to Buy on Monday, while raising its price target to GBP7.60 from GBP5.60.
The upgrade comes as the investment firm sees evidence that RS Group’s comprehensive new strategy is beginning to yield results after a period of implementation. Rothschild Redburn noted that with end markets now stabilizing, the company is positioned to leverage its efficiency improvements.
The research firm expects these strategic measures to both boost growth and enhance operating leverage for the electronic components distributor. Rothschild Redburn projects a robust margin recovery that should result in a 20% earnings per share compound annual growth rate through fiscal year 2029.
At 15 times price-to-earnings ratio, Rothschild Redburn believes RS Group’s current share price fails to capture the company’s growth opportunity. The firm expects future margin progress to be rewarded with a rerating of the stock.
RS Group, formerly known as Electrocomponents , distributes industrial and electronic products across multiple sectors globally.
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