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Why We Think Rexel S.A. (EPA:RXL) Could Be Worth Looking At

Simply Wall St

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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Rexel S.A. (EPA:RXL), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Rexel here.

Good value with adequate balance sheet

RXL's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. RXL’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps RXL expand. RXL's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of RXL's peers, it is also trading at a value below those of similar sizes in asset terms. This bolsters the proposition that RXL's price is currently discounted.

ENXTPA:RXL Intrinsic value, May 29th 2019

Next Steps:

For Rexel, I've compiled three key aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for RXL’s future growth? Take a look at our free research report of analyst consensus for RXL’s outlook.
  2. Historical Performance: What has RXL's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RXL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.