Jefferies lifts Australia's Reliance Worldwide earnings outlook, flags weak macro conditions
BUZZ-Jefferies lifts Australia's Reliance Worldwide earnings outlook, flags weak macro conditions **Jefferies upgrades FY27 earnings forecasts for Australia's Reliance Worldwide Corporation RWC.AX but says this is driven by better margins, tariff reversal and network benefits, rather than underlying earnings growth
** Plumbing products maker on Tuesday announced the closure of its brass facility in Melbourne, reflecting efforts to move production closer to end market North America and its shift from brass to stainless steel
** RWC expects a net annual EBITDA benefit of around US$9 million by FY27
** Jefferies now sees FY27 EBIT growth at ~16%, but expects minimal organic revenue growth
** Besides manufacturing expansion elsewhere, brokerage says Australia capacity cuts reflect weak macroeconomic conditions and limited new business options
** Expects macroeconomic conditions to remain tough across co's three major operating regions, with lock-in effects and affordability issues weighing on U.S. housing, and recent fiscal changes likely tempering APAC housing turnover
** Stock closed 3% lower to A$3.56 after co's capacity reduction announcement; down ~7% YTD
(Reporting by Shruti Agarwal in Bengaluru)
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Brief: Reliance Worldwide Corp Says Near 85 Employees To Be Affected By Closure Of Brass Manufacturing Ops In Australia