Reliance Worldwide Corp. ltd. (ASX: RWC) shares fell nearly 17% in the afternoon after the Australian plumbing supplies company warned of worsening financial operating conditions ahead.
Although Reliance is headquartered in Australia, it has a global footprint and derives most of its sales from the US market. The company pointed to inflation, rising interest rates and a strong US dollar as some of the issues it faces.
Amid rising interest rates, Reliance raised its interest expense forecast for FY23 to a range of US$27-30 million. The company previously forecast interest expense in the range of US$23 million to US$27 million.
Reliance has responded to inflationary pressures by raising prices for its products, but the company fears costs will continue to rise due to geopolitical tensions and supply chain disruptions.
On a positive note, Reliance expects a backlog of repairs and renovations to support its sales in the near term, and said it has resilient arms of its business that can remain robust in difficult conditions. .
Reliance Worldwide Stock Price Prediction
According to TipRanks’ analyst consensus rating, Reliance Worldwide stock is a moderate buy based on seven buys, two holds and one sell. Reliance Worldwide’s average price forecast of AU$4.72 implies an upside potential of around 57%.
Reliance stock receives positive mentions on financial blogs. Data from TipRanks shows that financial bloggers’ views are 100% bullish on Reliance, compared to an industry average of 67%.