The world is getting more complex, and that plays into Rexel’s (OTCPK:RXEEY) (RXL.PA) strengths as an electrical distribution specialist. Whether it's more advanced electrical infrastructure needed to support factory and warehouse automation or commercial building controls and green retrofits, Rexel is leveraged to these growth trends, as well as share gains in a fragmented U.S. market and overall efficiency gains from its digital strategy.
These shares have risen almost 60% since the time of my last update, handily outperforming not only the broader industrial sector, but also suppliers like ABB (ABB), Eaton (ETN), and Schneider (OTCPK:SBGSY). I believe better days lie ahead as Rexel leverages economic recoveries in North America and Western Europe, ongoing automation installations, upcoming green building retrofits, and internal digital efficiency efforts. With Rexel likely to leverage low single-digit revenue growth into mid-single-digit FCF growth, I believe these shares still over double-digit long-term annualized appreciation potential and nearer-term upside into the mid-$20s.
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Rexel: Still An Attractive Way To Get Long On Automation, Complexity, And Green Retrofits
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