Reliance Worldwide's (ASX:RWC) plan to close its Melbourne brass operations, and an expected earnings uplift of $9 million have boosted core earnings estimates, Jefferies said in a note on Tuesday, adding that underlying earnings growth remains limited.
The investment firm has raised its fiscal 2027 and fiscal 2028 EBIT estimates by 5% and 4%, respectively, as improved margins in the US offset the decline in APAC intercompany sales.
The firm made no changes to its underlying operating forecasts, as it projects macroeconomic conditions to remain challenging across all three major operating regions.
"Stock continues to screen cheap with management controlling controllables at a low point in the cycle," analysts at the firm commented.
Jefferies maintained a buy rating and increased price target to AU$4.20 from AU$3.80.