Metcash Limited (MTS) AI Stock Analysis

• Market Cap: $4.29B
• Dividend Yield: 4.62%
• Average Volume (3M): 3.41M
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.61
• Revenue Growth: 8.86%
• EPS Growth: 0.23%
• Country: AU
• Employees: 9,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Food Distribution
• EPS (TTM): 0.13
• Shares Outstanding: 1,098,989,100
• 10 Day Avg. Volume: 3,423,079
• 30 Day Avg. Volume: 3,413,774
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 3.55
• Enterprise Value/Ebitda: 8.45
• 1Y Price Target: $4.22
• Price Target Upside: 8.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 61 Neutral
• Price Target: AU$4.00 ▲(2.56% Upside)

Metcash Limited's overall stock score is driven by solid financial performance with steady revenue growth and strong cash flow generation. However, technical indicators suggest a bearish trend, and the company's increased leverage poses potential risks. The valuation is reasonable with an attractive dividend yield, but the low net profit margin and bearish market momentum weigh on the overall score.

Metcash Limited Business Overview & Revenue Model

Company Description

Metcash Limited operates as a wholesale distribution and marketing company in Australia and New Zealand. It operates through Food, Liquor, and Hardware segments. The Food segment distributes a range of products and services to independent supermarket and convenience retail outlets. The Liquor segment engages in the distribution of liquor products to independent retail outlets and hotels. The Hardware segment distributes hardware products to independent retail outlets; and operates company owned retail stores. The company sells its products under the IGA, Foodland, Mitre 10, Home Hardware, Total Tools, Cellarbrations, IGA Liquor, and the Bottle-O brand names. Metcash Limited was founded in 1920 and is based in Macquarie Park, Australia.

How the Company Makes Money

Metcash generates revenue primarily through its wholesale distribution model, where it purchases products from manufacturers and sells them to independent retailers. The company earns money from the sale of grocery, liquor, and hardware products, and its revenue streams are diversified across these sectors. Key revenue streams include wholesale sales to supermarkets, liquor stores, and hardware outlets, alongside additional income from services such as marketing, logistics, and supply chain management. Significant partnerships with suppliers allow Metcash to negotiate favorable terms and ensure a steady supply of goods, which enhances its profitability. Moreover, Metcash benefits from economies of scale due to its large purchasing volumes, leading to cost efficiencies that can be passed on to retailers, thereby increasing sales volume and revenue.

Metcash Limited Financial Statement Overview

Summary

Metcash Limited shows steady revenue growth and improving gross profit margins. Despite increased leverage, the company maintains a strong return on equity and robust cash flow generation. However, the low net profit margin and challenges in converting operating income into cash suggest areas for improvement.

Income Statement

Metcash Limited has demonstrated consistent revenue growth over the past few years, with a notable increase of 4.7% in the latest year. The gross profit margin has improved steadily, reaching 12.95%, indicating efficient cost management. However, the net profit margin remains relatively low at 1.64%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.16, indicating higher leverage, which could pose a risk if not managed carefully. Return on equity is strong at 17.42%, showcasing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced approach to financing assets.

Cash Flow

Metcash Limited has shown a significant improvement in free cash flow growth, up by 39.86%, which is a positive indicator of financial health. The operating cash flow to net income ratio is relatively low, suggesting potential challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 72.45%, indicating good cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.32B	17.32B	15.91B	15.80B	15.16B	14.32B
Gross Profit	1.51B	2.24B	1.94B	1.81B	1.65B	1.45B
EBITDA	633.90M	701.40M	624.60M	511.80M	467.70M	389.00M
Net Income	283.30M	283.30M	257.20M	259.00M	245.40M	239.00M
Balance Sheet
Total Assets	6.89B	6.89B	5.80B	5.38B	5.20B	4.85B
Cash, Cash Equivalents and Short-Term Investments	87.30M	87.30M	97.30M	89.50M	104.70M	124.60M
Total Debt	1.89B	1.89B	1.41B	1.49B	1.32B	1.03B
Total Liabilities	5.26B	5.26B	4.27B	4.29B	4.11B	3.56B
Stockholders Equity	1.63B	1.63B	1.52B	1.07B	1.08B	1.28B
Cash Flow
Free Cash Flow	390.50M	390.50M	346.70M	220.60M	310.60M	389.90M
Operating Cash Flow	539.00M	539.00M	482.60M	372.70M	432.30M	475.50M
Investing Cash Flow	-518.90M	-482.80M	-287.90M	-156.60M	-121.70M	-171.70M
Financing Cash Flow	-32.60M	-68.70M	-186.90M	-231.30M	-330.50M	-454.30M

Metcash Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.90
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:MTS, the sentiment is Negative. The current price of 3.9 is below the 20-day moving average (MA) of 4.06, below the 50-day MA of 4.02, and above the 200-day MA of 3.42, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 33.09 is Neutral, neither overbought nor oversold. The STOCH value of 30.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:MTS.

Metcash Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ING	72 Outperform	935.36M	10.43	0.00%	7.54%	-3.36%	-11.53%
TWE	71 Outperform	5.99B	13.71	9.13%	5.42%	6.47%	281.30%
COL	69 Neutral	31.68B	29.25	28.35%	2.92%	1.84%	-3.62%
MTS	61 Neutral	$4.29B	15.13	18.20%	4.62%	8.86%	0.23%
BGA	56 Neutral	1.65B	-193.55	-0.87%	2.22%	0.49%	-127.84%
WOW	49 Neutral	33.31B	34.71	19.81%	3.07%	1.70%	796.48%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Metcash Limited Corporate Events

Metcash Limited 2025 AGM Resolutions Passed with Strong Support

Metcash Limited announced the successful passing of all resolutions at its 2025 Annual General Meeting, reflecting the board’s recommendations. The resolutions included the election and re-election of directors and the approval of performance rights for the Group CEO, indicating strong shareholder support and stability in leadership, which could positively impact the company’s strategic direction and stakeholder confidence.

The most recent analyst rating on (AU:MTS) stock is a Buy with a A$4.50 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.

Metcash Announces Director Retirement and Board Transition

Metcash Limited announced the retirement of Murray Jordan from its Board of Directors, effective 31 October 2025. Jordan, who joined the board in 2016, has significantly contributed to the company’s progress, particularly in safety, sustainability, and cultural areas. The company is in the advanced stages of searching for a new Non-Executive Director, indicating a smooth transition and continued focus on strategic governance.

The most recent analyst rating on (AU:MTS) stock is a Buy with a A$4.50 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.

Metcash Limited Reports FY25 Financial Performance with Revenue Growth

Metcash Limited reported its financial performance for FY25, highlighting a 7.2% increase in group revenue to $19.5 billion and an 8.6% rise in EBITDA to $747.8 million. Despite challenges in the hardware sector, the company saw strong cash performance and resilience in its food and liquor divisions, although underlying profit after tax declined by 2.4% due to increased costs and depreciation.

The most recent analyst rating on (AU:MTS) stock is a Buy with a A$4.50 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.

Metcash Director Alters Shareholding Structure

Metcash Limited has announced a change in the director’s interest notice, involving an off-market transfer of ordinary shares by Director Douglas Jones to Kamasco Pty Ltd ATF The Kamasco Family Trust. This transfer, valued at approximately $1.05 million, reflects a strategic reallocation of shares, potentially impacting the company’s governance structure and stakeholder interests.

The most recent analyst rating on (AU:MTS) stock is a Buy with a A$4.50 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.