Australia's Reliance Worldwide falls further, Citi warns of earnings pain

Reliance Worldwide

23/08/2022 02:33

(Recasts to add share moves)
    ** Shares of Australian plumbing products and services firm
Reliance Worldwide Corp  RWC.AX  drop as much as 10.2% to A$3.8
    ** Stock to mark its biggest single-day pct fall since May
2020, if losses hold 
    ** Stock hits its lowest level since June 22; stock fell
6.2% on Monday on weak forecast and profit  urn:newsml:reuters.com:*:nL4N2ZY0Q5
    ** Citi warns RWC faces earnings hit from a weak housing
market; retains "sell" rating 
    ** Says lower pricing power, inventory de-stocking and
market volumes are hitting the housing market, and RWC will
track weakness in the repair, maintenance and improvement market
    ** RWC's business does not have enough pricing power, mix
benefits or new products to help it grow materially above a
declining market - brokerage     
    ** "We think RWC tracks closer to the market index than
other U.S. peers given limited control around its distribution,"
Citi says, also warning of interest costs and forex headwinds 
    ** Nine of 13 analysts rate the stock "buy" or higher, three
"hold" and one "strong sell"; median PT is A$5.00 – Refinitiv
data
    ** RWC stock down 32.5% this year, as of last close

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))