Reece Limited (REH) AI Stock Analysis

• Market Cap: $7.31B
• Dividend Yield: 2.15%
• Average Volume (3M): 3.18M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 1.78
• Revenue Growth: -1.39%
• EPS Growth: -24.40%
• Country: AU
• Employees: 18,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.20
• Shares Outstanding: 645,984,200
• 10 Day Avg. Volume: 1,810,767
• 30 Day Avg. Volume: 3,178,688
• 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: 1.50
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 4.29
• Enterprise Value/Ebitda: 13.32
• 1Y Price Target: $12.54
• Price Target Upside: 10.81% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 8

• Rating: 59 Neutral
• Price Target: AU$11.00 ▼(-2.83% Downside)

Reece Limited's overall stock score is primarily influenced by its strong financial performance, which is offset by bearish technical indicators. The valuation is moderate, providing some balance but not enough to significantly enhance the score. The absence of earnings call insights and corporate events means these factors do not impact the score.

Reece Limited Business Overview & Revenue Model

Company Description

Reece Limited (REH) is a leading distributor of plumbing, waterworks, and HVAC-R (heating, ventilation, air conditioning, and refrigeration) products in Australia and New Zealand. The company caters to a wide range of customers, including professional plumbers, builders, and commercial contractors. Reece Limited operates an extensive network of branches, offering a comprehensive range of products and services to support residential, commercial, and infrastructure projects.

How the Company Makes Money

Reece Limited makes money primarily through the sale of plumbing, waterworks, and HVAC-R products. The company's revenue model is based on distributing a wide array of products sourced from various manufacturers to its customer base, which includes trade professionals and businesses. Key revenue streams include retail sales from its expansive branch network and online sales through its digital platforms. Additionally, Reece Limited benefits from strategic partnerships with key suppliers and manufacturers, allowing it to offer exclusive products and competitive pricing. The company's earnings are also supported by its focus on customer service, technical support, and value-added services, which enhance customer loyalty and drive repeat business.

Reece Limited Financial Statement Overview

Summary

Reece Limited shows a strong financial position with consistent revenue growth and stable profitability. The balance sheet reflects improved leverage and a solid equity base. However, declining net profit margins and free cash flow growth could pose challenges. Continued focus on cost management and cash flow optimization will be crucial for sustaining growth.

Income Statement

Reece Limited has demonstrated consistent revenue growth, with a notable increase in total revenue over the years. The gross profit margin has remained stable, indicating effective cost management. However, there has been a decline in net profit margin in the latest year, which could be a concern if it continues. The EBIT and EBITDA margins have shown slight fluctuations but remain healthy overall.

Balance Sheet

The company's debt-to-equity ratio has improved over the years, indicating better leverage management. Return on equity has been relatively stable, reflecting consistent profitability. The equity ratio suggests a solid capital structure, although there is room for improvement in reducing debt levels further.

Cash Flow

Operating cash flow has been positive, but there has been a decline in free cash flow growth, which could impact future investments. The operating cash flow to net income ratio indicates efficient cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in maintaining cash reserves.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.98B	8.98B	9.10B	8.84B	7.65B	6.27B
Gross Profit	2.56B	2.56B	2.61B	2.51B	2.14B	798.32M
EBITDA	823.17M	863.32M	983.92M	912.41M	820.78M	698.22M
Net Income	316.94M	316.94M	419.17M	387.61M	392.49M	285.60M
Balance Sheet
Total Assets	7.42B	7.42B	7.09B	6.92B	6.61B	6.12B
Cash, Cash Equivalents and Short-Term Investments	275.41M	275.41M	341.38M	372.71M	220.48M	828.97M
Total Debt	1.97B	1.97B	1.83B	1.96B	1.90B	2.01B
Total Liabilities	3.37B	3.37B	3.21B	3.30B	3.29B	3.23B
Stockholders Equity	4.05B	4.05B	3.88B	3.63B	3.32B	2.89B
Cash Flow
Free Cash Flow	357.89M	341.40M	492.93M	588.90M	21.68M	299.00M
Operating Cash Flow	599.78M	599.78M	750.90M	766.38M	221.79M	371.64M
Investing Cash Flow	-342.50M	-342.50M	-243.96M	-309.52M	-280.98M	-67.92M
Financing Cash Flow	-323.53M	-323.53M	-538.80M	-307.12M	-574.66M	-462.13M

Reece Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:REH, the sentiment is Negative. The current price of 11.32 is above the 20-day moving average (MA) of 10.91, below the 50-day MA of 12.25, and below the 200-day MA of 16.45, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 47.90 is Neutral, neither overbought nor oversold. The STOCH value of 52.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:REH.

Reece Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNT	68 Neutral	AU$4.26B	17.17	34.90%	4.18%	1.48%	25.46%
SGI	64 Neutral	AU$88.08M	25.67	―	1.24%	24.67%	96.27%
RWC	64 Neutral	AU$3.13B	16.46	8.99%	1.90%	6.78%	16.25%
NWH	64 Neutral	AU$2.15B	76.40	4.54%	3.52%	12.18%	-73.81%
REH	59 Neutral	$7.31B	22.95	7.85%	2.15%	-1.39%	-24.40%
BAP	46 Neutral	AU$1.08B	38.24	3.29%	4.23%	-3.00%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Reece Limited Corporate Events

Reece Limited Issues Unquoted Performance Rights

Reece Limited has announced the issuance of 22,531 unquoted performance rights under an employee incentive scheme. These securities are not intended to be quoted on the ASX, and this move is part of the company’s ongoing efforts to motivate and retain key personnel, potentially impacting its operational efficiency and stakeholder engagement.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$19.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Announces Cessation of Securities

Reece Limited has announced the cessation of 56,519 performance rights due to the conditions for these securities not being met. This development may impact the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments or strategic shifts.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$19.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Announces Cessation of Securities

Reece Limited has announced the cessation of certain securities, specifically 4,173 retention rights, as the conditions for these securities have not been met or have become incapable of being satisfied. This announcement may impact the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments or strategic decisions.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$19.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Announces Board Changes with Resignation of Megan Quinn

Reece Limited announced the resignation of Megan Quinn from its board, effective July 2, 2025. Quinn, who has served as a non-executive director since 2017, expressed her respect for the company’s values and ambition. Chairman and CEO Peter Wilson thanked Quinn for her contributions and indicated that the board is evolving to include a mix of skills, experience, and diversity to support the company’s future. The company plans to announce new board appointments soon.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$18.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Announces Board Resignation

Reece Limited announced the resignation of Ross McEwan as a non-executive and Lead Independent Director, effective June 30, 2025. McEwan is stepping down to focus on his role as Chair of BHP Group Limited. The company expressed gratitude for his contributions and is committed to maintaining a diverse board with a suitable mix of skills and experience, with plans to announce a new Lead Independent Director soon.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$19.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Reports Challenging FY25 Trading Conditions Amid Housing Market Softness

Reece Limited has announced its FY25 trading update, highlighting a challenging trading environment due to ongoing housing market softness in Australia, New Zealand, and the US. The company expects its Group EBIT for FY25 to be between A$548m and A$558m, reflecting macro-economic headwinds and subdued underlying volumes. In the US, high exposure to the residential new construction sector and increased competition have impacted profitability, while interest rate cuts in Australia and New Zealand have yet to boost housing activity. Despite these challenges, Reece remains confident in its long-term strategy.

The most recent analyst rating on (AU:REH) stock is a Sell with a A$19.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.