Recovery case strengthening; upgrade to Buy

Research evidence excerpt

Recovery case strengthening; upgrade to Buy

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Buy RS Group 1 July 2026

Company Update

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 29 Jun 2026 (GBP) 587.00

RS1R.L RS1 LN LSE RS1R

Price Target (GBP) 775.00

Business Services

732.50 -

Distributors 52-week range (GBP) 541.50

Recovery case strengthening; upgrade

Valuation & Risks to Buy

David Brockton

Recovery case strengthening Research Analyst

A prospective end to the Iran war should position European cyclicals for improved +44-20-754-11721

performance as confidence in industrial activity rebuilds - we would expect RS to

James Beard

be a beneficiary of this. Research Analyst

+44-20-754-56765

PMIs resilient and geopolitical risk fading Steve Woolf

Our recent caution in respect of spillover risk from the Iran war has also not Research Analyst

materialised, with demand robust and PMI lead indicators positive. We have +44-20-754-54604

historically found that the international manufacturing cycle has explained 2/3 of

Bharat Rajesh, CFA

RS Group’s growth given its exposure to short-cycle industrial and MRO demand.

Research Associate

Based on historical correlation and recent PMIs, our model implies 4% LFL growth

is now possible for the business in FY27. The group would also lap some prior-year

self-inflicted execution issues through FY27, supporting growth. Key changes

700.00 to

TP ↑ 10.7%

LFL outlook raised and EPS upgraded 4%, above consensus 775.00

The combination of resilient lead indicators, reduced geopolitical risk, and our Rating Hold to Buy ↑

greater confidence in the outlook, lead us to upgrade our FY27 LFL outlook from DB EPS (GBP) 40.53 to 42.23 ↑ 4.2%

+3% to +4%, still factoring a moderation in PMIs from current levels.