RS Group: A zephyr or a tailwind?

Research evidence excerpt

RS Group: A zephyr or a tailwind?

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Hold RS Group 21 May 2026

Forecast Change

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 20 May 2026 (GBP) 690.00

RS1R.L RS1 LN LSE RS1R

Price Target (GBP) 700.00

Business Services

732.50 -

Distributors 52-week range (GBP) 541.50

A zephyr or a tailwind?

Valuation & Risks

David Brockton

Signs of improvement Research Analyst

RS Group’s FY26 results provided optimism that the business is seeing improving +44-20-754-11721

demand trends, consistent with recent resilient PMIs. Our caution in respect of the

James Beard

risk of some spill-over from the Middle East conflict appears wrong so far. If this can Research Analyst

continue then the business could be on the cusp of an upgrade cycle through FY27, +44-20-754-56765

but an improvement in growth to low-single-digit LFLs is nevertheless required to

Steve Woolf

mitigate guided higher operating costs, and we would still argue that spill-over risk

Research Analyst

is not zero.

+44-20-754-54604

Bharat Rajesh, CFA

What do PMIs imply?

Research Associate

RS saw LFLs improve from -0.6% in its Q3 26, to -0.3% in Q4 26, so the magnitude

of current momentum needs to be taken into context, but most of its major markets

are now described as in low-single-digit growth, the comps are weak in early FY27 Key changes

(lapping two prior year execution issues), the business lags PMIs that have recently DB EPS (GBP) 39.43 to 40.53 ↑ 2.8%

moved higher >50, and many of its listed peers are performing strongly. Using the

Revenue (GBPm) 2,900 to 3,031 ↑ 4.5%

group’s long-term historical correlation to PMIs we would now estimate a

Source: Deutsche Bank

reasonable LFL range for RS of +6% (if cal. Q1 PMIs hold >50) down to +3% (should