Plumbing business RWC is offering solid value following its 15% correction, with earnings set to improve through better volumes and margins. Once the cycle turns, we believe the upside from the operating leverage should flow through, noting the 100-150bps EBITDA margin leverage to +5% volumes remains – volumes are currently 10-20% below normal across its various markets.
- We like the risk/reward towards RWC around $5 although we prefer both JHX and RWC.
MM is cautiously bullish towards RWC around $5
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