RS Group plc "Another delay to recovery hopes?" (Neutral) McKenzie

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RS Group plc "Another delay to recovery hopes?" (Neutral) McKenzie

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RS Group plc Equities

United KingdomAnother delay to recovery hopes?

Industrial Services

12-month rating Neutral

Earnings growth prospects likely pushed out even further; Neutral, 620p PT

Along with many distribution companies, RS Group has been faced with profit 12m price target 620p

normalisation pressures and weak customer demand over 2023-25. The company looks Prior : 750p

to have stabilised profits (adj. EBITA -35% from Mar'23 peak, albeit still +20% from the

Price (11 May 2026) 616p

pre-pandemic level), but we believe that it is unlikely to drive a return to growth over

2026 given further cyclical risks, limited evidence of accelerating market share gains, RIC: RS1R.L BBG: RS1 LN

and the need to balance cost savings with reinvestments. As a result, we forecast profits

Trading data and key metrics

to trend broadly sideways in the y/e Mar'27e (vs. consensus forecasting +5-6% growth),

52-wk range 733p-542

and so see the current c16x fwd PE as fair for profits that are stabilising at low levels. Our

updated Price Target is 620p and we remain Neutral-rated. Market cap. £2.89b/US$3.95b

Shares o/s 470m (ORD)

Cyclical conditions challenging; limited evidence of growing structural gains Free float 100%

Given RS Group operates in broad and highly-fragmented markets with a digital-led Avg. daily volume ('000) 1,697

model, we have long seen a significant organic growth opportunity. However to capture Avg. daily value (m) £10.5

this it needs consistent new wins (in terms of wallet share gains and new clients), while Common s/h equity (03/26E) £1.41b

in the short-term it can be somewhat dependent on customer activity levels; we P/BV (03/26E) 2.0x