Sunday, May 5, 2019

Rexel Finally Getting Some Love

It has been a little lonely at times being a Rexel (OTCPK:RXEEY) [RXL.PA] bull, and not just because this is an almost-unknown name to U.S. investors (and the U.S. ADRs have very low day-to-day liquidity). Although the company has been making meaningful progress in restructuring its go-to-market effort (becoming more multi-channel and digital-friendly and meeting the customer on the customer's terms) and repositioning its U.S. business, the quarter-to-quarter financial results haven't always showed unequivocal progress.

I still believe there's more upside to be gained from Rexel's restructuring efforts, growth in commercial and industrial electrical installations, and some recovery in ABB's (ABB) GEIS business (a major supplier, particularly in the U.S.). I've trimmed back my estimates on an abundance of caution (maybe an overabundance) due to weakening European PMI numbers, but I still see double-digit upside on the back of low single-digit long-term revenue growth.

Read more here:
Rexel Finally Getting Some Love

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