Rexel SA: Hold Rating Amid Growth Potential and Valuation Concerns

Lucas Ferhani, an analyst from Jefferies, has initiated a new Hold rating on Rexel SA (0KBZ).

Lucas Ferhani has given his Hold rating due to a combination of factors influencing Rexel SA’s current and future performance. The company is expected to benefit from organic growth, particularly in the European residential markets and the US data centers, which should support margins into 2026. However, Ferhani notes that the recovery is already reflected in the consensus estimates, with risks tied to the company’s significant exposure to France and Germany, where economic data and political risks are less favorable.
Despite the potential for growth, Ferhani expresses concerns about the sustainability of the valuation re-rating, given the company’s current trading at a discount compared to its peers. While there is a positive outlook for US margins, the European market remains uncertain, and more evidence is needed to justify a higher valuation. The Hold rating is also supported by the company’s financial strategies, including M&A activities and share buybacks, which are expected to enhance returns but are already factored into the market’s expectations.