Jefferies analyst David Farrell has maintained their neutral stance on RSW stock, giving a Hold rating on October 13.
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David Farrell has given his Hold rating due to a combination of factors influencing Renishaw’s recent performance. The company’s first-quarter revenue growth was below market expectations, with a modest increase of 2.8% at constant exchange rates, compared to the consensus forecast of 4.6%. This shortfall was partly offset by tariff-related surcharges, but overall reported revenue still declined by 1.8%. The European, Middle Eastern, and African (EMEA) region was particularly weak, experiencing a significant drop in revenue due to soft demand for Industrial Metrology products and challenges related to ERP implementation, which are anticipated to improve in the following quarter.
Despite these short-term challenges, there are positive signs for the future. The company has implemented cost-saving measures, reducing headcount by 6.5% and aiming to enhance margins to over 20% in the medium term. Additionally, management has noted an improving order book, particularly in the CMM and Spectroscopy business lines. However, given the significant recovery in the share price since April, Farrell suggests that the current valuation already reflects these improvements, leading to a Hold recommendation.
In another report released on October 13, Deutsche Bank also maintained a Hold rating on the stock with a p3,940.00 price target.