Barclays downgrades Rexel stock to Equalweight on valuation concerns By Investing.com
Key Takeaways
- Barclays downgraded Rexel (RXL) from Overweight to Equalweight with a EUR30.00 price target.
- The downgrade was triggered by Rexel's 10% outperformance relative to the SXNP index over the last three months.
- Barclays believes the risk-reward profile for key growth areas (electrification, data centers) is now more attractive elsewhere.
- Evidence of slowing momentum includes reduced incremental pricing traction in the third quarter compared to the second.
- Further stock re-rating for Rexel would depend on stronger European construction recovery confidence or portfolio changes.
Barclays downgraded Rexel (RXL) from Overweight to Equalweight on Thursday, assigning a price target of EUR30.00 following the stock's 10% outperformance relative to the SXNP index over the past quarter. The downgrade stems from the belief that the favorable risk-reward profile associated with electrification, data center, and European construction recovery opportunities is now more attractive in alternative investments. Barclays stated that the positive factors supporting their previous Overweight rating have largely materialized in the current stock price. Furthermore, the research firm observed less meaningful incremental pricing traction in the third quarter compared to the second, suggesting customers are becoming resistant to price increases for electrical equipment. While acknowledging Rexel's resilience during market weakness, Barclays indicated that a future re-rating would require increased confidence in the European construction recovery or significant portfolio changes.
