Q: Peter; Is RCH a viable takeover candidate? And could you update your thoughts since Aug.. Thanks.
Rod
Rod
5i Research Answer:
RCH's small size and valuation (23X) likely limit the universe of potential buyers. We doubt insiders (8%) would be that interested, either. EPS next year will still be lower than 2022's peak, but will show growth from this year. Debt is OK, about 1.5X cash flow. The last quarter was decent and estimates have been rising. It is managing tariffs well enough, but there is still some economic uncertainty here. The housing sector (one of its main customers) is not the easy call it has been in other cycles. We would give it an OK--but not great--rating.