REXEL

Analysis of Rexel share price

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The French CAC 40 index takes into account the listing of many shares of companies from the energy and electricity sectors. This is of course the case for the most well-known stocks such as EDF shares, but also for other stocks such as Rexel shares that we will present to you today. You will find in this article concrete information about its share price and a quick analysis of its historical prices.  

Elements that can influence the price of this asset:

Analysis N°1

The Rexel share is considered a cyclical stock. In particular, it is highly exposed to the oil and gas sector, which has a 15% impact on sales, but also to construction markets, with a delay between the resumption of construction and the recovery in sales of electrical equipment equivalent to 6 to 15 months on average.

Analysis N°2

It goes without saying that the roadmap and the objectives set up previously and which have a horizon of the year 2020 must be closely monitored as well as the achievement of the objectives set. Another objective this time concerns the annual growth in operating profit, which should be double the growth in turnover.

Analysis N°3

There are also high expectations for the potential recovery in construction in Australia and France, which has yet to be confirmed.

Analysis N°4

It should be noted here that the company's capital is open capital, more than 98% of which is held by the public, which leaves the possibility for other companies to issue buyout offers.

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General presentation of Rexel :

The Rexel Group is the world's leading distributor of electrical supplies to professionals. With a network of more than 2,300 points of sale, it provides electrical products and solutions for residential and commercial buildings and infrastructures. Most of its turnover is generated in the tertiary sector, followed by the industrial sector and finally the residential sector.

Its market extends throughout Europe, but also in North America, Asia Pacific and Latin America.

 

Know the competition of the Rexel share :

 

Strategic alliances set up by the Rexel Group :

 

The advantages and strengths of the Rexel share as a stock market asset :

First of all, the Rexel group's positioning on the world market is of course one of its main assets. Indeed, Rexel is the international leader in the professional distribution of electrical supplies for industry, commercial construction and residential building. Rexel holds more than 8% of the market share in this business sector.

We can also appreciate the distribution of the group's activities with regard to its various products. There are seven main product families, with electrical installation equipment accounting for more than 40% of sales, lighting ducts or cables each accounting for 20% of sales, security and communication, HVAC engineering, tools and white and brown products. This diversity of products provides the group with an interesting protection against the risks associated with one and the same type of product.

From a geographical point of view, Rexel's activities are also particularly well distributed. Thus, Rexel generates 56% of its sales in Europe, 43% in the United States and 10% in Asia. Here again, this gives it less exposure to the geographical risk associated with a single sector.

Also with regard to the Rexel Group's customers, there is an interesting distribution between the different end markets. Thus, the commercial building sector generates 44% of the Group's sales, the industrial sector generates 35% and the residential sector generates 21%.

The Rexel Group also benefits from a definite advantage over its competitors, as it generates more than two-thirds of its sales in markets in which it is either the leader or the second largest. We can also appreciate the very interesting rise in digital sales, which alone account for more than 16% of sales.

Finally, the Rexel Group is currently benefiting from a growth driver in energy savings and renewable energies, which are of course two sectors that have been booming in recent years.

From a strictly financial point of view, it should also be noted that Rexel follows strict discipline in order to reduce its level of debt, which is already bearing fruit.

 

Disadvantages and weaknesses of the Rexel share as a stock market asset :

First of all, we know that the sector in which the Rexel Group operates is a particularly cyclical one. The Group's activities are therefore closely linked to industrial investments and construction and renovation expenditure, which follow more or less regular cycles and are also dependent on the economic climate.

Another major weakness of the group is the fact that the oil and gas industries are currently experiencing a sharp decline in activity, particularly due to the fall in the prices of these raw materials. This also applies to copper, which is used in particular for the manufacture of cables. These various factors are of course having a negative impact on the Rexel Group's sales. We also regret the current sluggishness of the Chinese industry, which is one of Rexel's preferred targets.

Another economic event has recently penalized Rexel's activities. This is of course Brexit, which has caused the group's sales to fall by nearly 8% in 2017 and could further increase these losses.

Analysts also regret the lack of visibility on the company's results with few clearly established objectives and a slight decline in the dividend over the last few years.

Finally, shareholders and stock market investors were also disappointed by the medium-term postponement of the 6.5% margin rate that was initially planned for the 2016-2018 period, which leaves doubt as to the company's ability to meet its commitments.

Frequently Asked Questions

How is Rexel's capital currently distributed?

As of December 31, 2019, Rexel's share capital was distributed as follows: 1.69% of the Group's shares belong to the management, members of the Board of Directors and employees of the company. 80.13% of this capital is floating and therefore held by the public. Cevian Capital Partners Limited holds 17.60% of the company's shares. Finally, the remaining 0.58% of the capital is held in treasury stock by the Rexel Group.

Are Rexel shares listed on indices other than the CAC 40?

Of course, the Rexel group's share is currently part of the composition of the French CAC 40 benchmark index, which includes the 40 companies with the largest capitalization in the country. But what is less well known is that it is also included in the composition of other stock market indices, including the SBF 120, CAC Mid 100, CAC AllTrade, CAC AllShares, FTSE EuroMid, STOXX600, FTSE4Good, STOXX® Global ESG Leaders, Ethibel Sustainability Index Excellence Europe, Euronext Vigeo Eiris Europe 120 and the Dow Jones Sustainability Index Europe.

What is the current performance of the Rexel share?

As of July 3, 2020, Rexel's share performance since the beginning of 2020 has been -12.79%. Over the same period, the share price has seen a low of €4,921 and a high of €13,415. Of course and as part of your technical analysis of this stock, you will also need to monitor other indicators over the longer term.

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