- RS Group
- 21 May 2026 15:41:45
Source: Sharecast
"The new news was an improvement in the top line run-rate of late, better than expected free cash flow and a £100m buyback," RBC said. "Clearly the macro outlook remains uncertain, but RS1 continues to control the controllables."
RBC said its underlying assumptions are largely unchanged but 27/28 earnings per share estimates move up 2%/4% for the buyback.
The bank maintained its ‘outperform’ rating on the stock and said its positive view was unchanged.
"Despite ongoing macro uncertainty, we continue to see RS Group as positioned well for further recovery in PMIs when it comes, and going forwards, we would also expect to see some benefit from the investment that has been made in the business over the last few years," it said.
"It is also encouraging to see a strong H2 gross margin performance, highlighting the value-added nature of RS1's proposition. Medium term, we see scope for further share gains and improved margins (from efficiencies, leverage and greater penetration of RS Pro and value-added services)."
RBC said the balance sheet also remains strong with FY27E gearing estimated to be circa 1.1x (post the £100m buyback) providing options for further M&A, which it doesn’t factor into its forecasts or target price, or cash returns.