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Reece Limited
(Sydney:REH)
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Rating:65Neutral
Price Target:
AU$18.00
â–˛(8.24% Upside)
Action:Reiterated
Date:08/25/26
The score is primarily supported by solid overall financial quality (scale growth and strong FY26 cash generation) and a constructive but not strongly trending technical setup (price above major moving averages). These positives are tempered by expensive valuation (high P/E, low yield) and a mixed earnings outlook driven by flat group profitability and ongoing U.S. margin and macro risks.
Positive Factors
ANZ Growth and Market Position
ANZ growth in both sales and EBIT indicates resilient demand and operating leverage in Reece’s core market. Its branch, showroom and trade-distribution network supports repeat purchasing and strengthens customer relationships over the medium term.
Negative Factors
Margin and Profitability Pressure
Flat EBITDA and lower EBIT despite revenue growth indicate that operating costs and investment are absorbing incremental sales. Net margin has also declined from about 5.1% in 2022 to 3.3% in 2026, limiting earnings scalability.
Read all positive and negative factors
Positive Factors
Negative Factors
ANZ Growth and Market Position
ANZ growth in both sales and EBIT indicates resilient demand and operating leverage in Reece’s core market. Its branch, showroom and trade-distribution network supports repeat purchasing and strengthens customer relationships over the medium term.
Read all positive factors
Reece Limited (REH) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$10.19B
Dividend Yield1.06%
Average Volume (3M)552.78K
Price to Earnings (P/E)32.7
Beta (1Y)1.64
Revenue Growth4.46%
EPS Growth1.20%
CountryAU
Employees9,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.50
Shares Outstanding615,092,000
10 Day Avg. Volume491,038
30 Day Avg. Volume552,779
Financial Highlights & Ratios
PEG Ratio16.89
Price to Book (P/B)2.86
Price to Sales (P/S)1.14
P/FCF Ratio22.22
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$16.67Price Target Upside0.24% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)0.53
Revenue Forecast (FY)AU$9.72B
Reece Limited Business Overview & Revenue Model
Company Description
Reece Limited operates as a major distributor of various essential products across Australia, the United States, and New Zealand. Its comprehensive product range includes plumbing, bathroom amenities, heating, ventilation, and air-conditioning (HV...
How the Company Makes Money
Reece makes money primarily by selling plumbing and related building services products sourced from manufacturers and sold through its branch network to trade and commercial customers. Revenue is generated from product sales across multiple catego...
Reece Limited Earnings Call Summary
Earnings Call Date:Aug 23, 2026
(Q4-2026)
| Next Earnings Date:Mar 03, 2027
Earnings Call Sentiment Neutral
The call presented a mixed picture: solid topline growth (A$9.4bn, +4.5%) and clear operational/strategic progress in ANZ (ANZ sales +8.3%, ANZ EBIT +6%), meaningful U.S. network expansion (net +25 branches) and strong cash generation and capital returns (A$645m operating cash inflow, A$401m buybacks). Offsetting these positives were flat group EBITDA, a modest decline in group EBIT, notable margin pressure in the U.S. (LFL sales -1.7%, U.S. EBIT -13%), elevated costs from ongoing investment, and exposure to a weak U.S. residential market and macro uncertainty. Management emphasized a through‑the‑cycle, multi‑year strategy and expects returns to recover as growth investments moderate, but near‑term uncertainty (particularly in the U.S.) tempers the outlook.Positive Updates
Group Revenue Growth
Sales revenue of A$9.4 billion, up 4.5% year-on-year, demonstrating topline growth across the group.
Negative Updates
Flat EBITDA and Lower Group EBIT
Group EBITDA essentially flat at A$901 million; Group EBIT down 2.6% to A$534 million, signaling margin pressure despite revenue growth.
Read all updates
Q4-2026 Updates
Positive
Negative
Group Revenue Growth
Sales revenue of A$9.4 billion, up 4.5% year-on-year, demonstrating topline growth across the group.
Read all positive updates
Company Guidance
Management guided that ANZ enters FY27 with a solid pipeline to support first‑half momentum while the U.S. is expected to deliver only modest sales growth; the U.S. rollout remains a multi‑year plan with an anticipated 15–20 net new branches p.a. (after net 25 opened in FY26 and 24 in FY25). Key numeric pointers: FY26 sales $9.4bn (+4.5%), EBITDA $901m (flat), EBIT $534m (‑2.6%), EPS $0.495, return on capital 11.9%; exiting FY26 net debt $744m (1.0x EBITDA, down from 1.5x at Dec), net operating cash inflow $645m, net working capital/sales 19%, $401m returned via buybacks, FY26 capex 1.9% of sales with management expecting capex to normalise toward the historic ~2–3% range, FY27 gross interest expense ~$60–70m (FY26 $66m), and a further ~$10m Metalflex amortisation impact in FY27; management reiterated risks from soft U.S. residential construction, interest‑rate sensitivity and housing affordability.Reece Limited Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
69
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 9.38B | 8.98B | 9.10B | 8.84B | 7.65B |
| Gross Profit | 2.71B | 2.56B | 2.61B | 2.51B | 2.14B |
| EBITDA | 895.02M | 863.32M | 983.92M | 912.41M | 820.78M |
| Net Income | 308.15M | 316.94M | 419.17M | 387.61M | 392.49M |
Balance Sheet | |||||
| Total Assets | 7.67B | 7.42B | 7.09B | 6.92B | 6.61B |
| Cash, Cash Equivalents and Short-Term Investments | 327.67M | 275.41M | 341.38M | 372.71M | 220.48M |
| Total Debt | 2.25B | 1.97B | 1.83B | 1.96B | 1.90B |
| Total Liabilities | 3.93B | 3.37B | 3.21B | 3.30B | 3.29B |
| Stockholders Equity | 3.75B | 4.05B | 3.88B | 3.63B | 3.32B |
Cash Flow | |||||
| Free Cash Flow | 482.49M | 341.40M | 492.93M | 588.90M | 21.68M |
| Operating Cash Flow | 645.17M | 599.78M | 750.90M | 766.38M | 221.79M |
| Investing Cash Flow | -156.99M | -342.50M | -243.96M | -309.52M | -280.98M |
| Financing Cash Flow | -432.53M | -323.53M | -538.80M | -307.12M | -574.66M |
Reece Limited Technical Analysis
Positive
16.63
Price Trends
16.49
Positive
15.48
Positive
14.67
Positive
Market Momentum
-0.03
Positive
49.27
Neutral
69.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:REH, the sentiment is Positive. The current price of 16.63 is below the 20-day moving average (MA) of 16.73, above the 50-day MA of 16.49, and above the 200-day MA of 14.67, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 49.27 is Neutral, neither overbought nor oversold. The STOCH value of 69.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:REH.
Reece Limited Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | AU$502.41M | 10.68 | 16.46% | 8.67% | 0.92% | 12.22% | |
65 Neutral | AU$10.19B | 32.66 | 8.32% | 1.06% | 4.46% | 1.20% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | AU$210.07M | 13.64 | 10.34% | 2.50% | 3.97% | 61.65% | |
62 Neutral | AU$374.86M | 15.50 | 10.64% | 5.59% | 30.67% | -24.67% | |
59 Neutral | AU$3.16B | 249.58 | 0.81% | 1.57% | -5.16% | -93.82% | |
50 Neutral | AU$63.27M | -3.75 | -14.13% | 2.88% | 2.69% | 51.68% |
* Industrials Sector Average
AU:REH
Reece Limited
16.33
6.29
62.68%
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4.28
0.20
4.77%
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Waterco Limited
6.00
-0.21
-3.30%
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Acrow Formwork and Construction Services Limited
0.89
-0.10
-9.79%
AU:GWA
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1.96
-0.43
-17.85%
Reece Limited Corporate Events
Reece updates market on director Peter Wilson’s expanded equity interests
Aug 23, 2026
Reece Limited has disclosed an updated statement of director Peter Wilson’s interests in company securities, detailing his direct shareholding and equity awards under the Reece Long Term Incentive Plan. The filing confirms his direct ownersh...
Reece Limited Reports Lapse of Performance Rights and Capital Adjustment
Aug 23, 2026
Reece Limited has notified the market of the cessation of 489,285 performance rights, which lapsed because the conditional requirements attached to these rights were not met or became incapable of being satisfied. The announcement reflects an adju...
Reece Declares Semi-Annual Dividend for June 2026 Period
Aug 23, 2026
Reece Limited has declared a semi-annual dividend of AUD 0.134 per ordinary fully paid share for the six-month period ended 30 June 2026, reinforcing its pattern of returning capital to shareholders. The dividend will trade ex on 6 October 2026, w...
Reece Lodges 2026 Corporate Governance Statement and Appendix 4G
Aug 23, 2026
Reece Limited is an Australia-listed entity that follows the ASX Corporate Governance Council Principles and Recommendations and discloses its framework through its investor website. It has formal governance documents, including a board charter an...
Reece Limited Publishes FY26 Annual Report for Year Ended 30 June 2026
Aug 23, 2026
Reece Limited has released its FY26 Annual Report for the 12-month period ended 30 June 2026, providing investors and stakeholders with the latest comprehensive overview of its financial and operational performance. The publication of the annual r...
Reece posts modest FY26 growth as ANZ recovery offsets U.S. housing softness
Aug 23, 2026
Reece Limited reported FY26 sales revenue of $9.38 billion, up 4.5%, with EBITDA flat at $901 million and EBIT down 2.6% to $534 million, while NPAT slipped 2.8% to $308 million and EPS edged 0.7% higher to 49.5 cents. The company highlighted reco...
Reece Limited Files FY26 Preliminary Final Report With ASX
Aug 23, 2026
Reece Limited has released its preliminary final report for the financial year ended 30 June 2026, lodging its FY26 Appendix 4E results with the ASX. The disclosure provides the market with full-year financial information, marking a key regulatory...
Reece Limited Announces Lapse of Employee Equity Rights
Jul 15, 2026
Reece Limited, listed on the ASX under the code REH, operates in the plumbing and bathroom products sector, supplying a range of fixtures and related solutions to residential and commercial markets. The company is a significant player in its field...
Reece Issues New Unquoted Rights Under Employee Incentive Scheme
Jul 15, 2026
Reece Limited, traded on the ASX as REH, is a major player in the plumbing and bathroom products market, serving both professional trade customers and retail consumers. The group incorporates equity-based compensation into its remuneration framewo...
Reece Group Sets August Date for FY26 Results Webcast
Jul 9, 2026
Reece Group has announced timing and access details for the release of its financial results for the year ended 30 June 2026, confirming it will publish FY26 earnings on 24 August 2026. The company will host a webcast briefing for analysts and inv...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.