Reliance Worldwide Corp. Ltd. (ASX:RWC) shares were down almost 17% by the afternoon, after the Australian plumbing supplies company warned of worsening financial operating conditions ahead.
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Although Reliance is headquartered in Australia, it has a global footprint and draws most of its sales from the U.S. market. The company flagged inflation, rising interest rates, and a strong U.S. dollar as some of the issues it faces.
Amid rising interest rates, Reliance raised its FY23 interest expense guidance to a range of US$27 million to US$30 million. The company previously forecast interest expense in the band of US$23 million to US$27 million.
Reliance has responded to inflationary pressures by hiking its product prices, but the company fears costs could continue to grow due to geopolitical tensions and supply chain disruptions.
On a positive note, Reliance expects a backlog of repair and remodelling work to support its sales in the short-term, and said it has resilient arms of its businesses that can remain robust amid challenging conditions.
Reliance Worldwide share price prediction
According to TipRanks’ analyst rating consensus, Reliance Worldwide stock is a Moderate Buy based on seven Buys, two Holds, and one Sell. The average Reliance Worldwide price prediction of AU$4.72 implies about 57% upside potential.
Reliance stock is receiving favourable mentions on financial blogs. TipRanks data shows that financial blogger opinions are 100% Bullish on Reliance, compared to a sector average of 67%.
