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Rural Funds Group
(Sydney:RFF)
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Rating:65Neutral
Price Target:
AU$2.00
▼(-9.91% Downside)
Action:Reiterated
Date:08/22/26
The score is driven by attractive valuation (low P/E and high yield) and constructive balance-sheet progress highlighted on the earnings call (deleveraging, improved headroom, asset sales at premiums). These positives are tempered by weaker cash-flow quality (volatile/negative free cash flow) and a flat FY27 AFFO outlook with a ~100% payout ratio, while technical signals are mixed and do not strongly reinforce upside momentum.
Positive Factors
Rental income growth
Growing net property income and indexation mechanisms support recurring rental revenue. As developed orchards mature, the leasing base can expand while contractual rent reviews may provide ongoing income resilience.
Negative Factors
Flat AFFO and payout pressure
Flat AFFO indicates limited underlying earnings growth, while distributing essentially all AFFO leaves little buffer for operational setbacks or capital needs. This constrains distribution resilience unless rental growth or asset productivity improves.
Read all positive and negative factors
Positive Factors
Negative Factors
Rental income growth
Growing net property income and indexation mechanisms support recurring rental revenue. As developed orchards mature, the leasing base can expand while contractual rent reviews may provide ongoing income resilience.
Read all positive factors
Rural Funds Group (RFF) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$759.96M
Dividend Yield6%
Average Volume (3M)791.66K
Price to Earnings (P/E)6.7
Beta (1Y)0.45
Revenue Growth6.51%
EPS Growth339.85%
CountryAU
Employees260
SectorReal Estate
Sector Strength53
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.29
Shares Outstanding389,723,000
10 Day Avg. Volume501,222
30 Day Avg. Volume791,660
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)0.68
Price to Sales (P/S)5.46
P/FCF Ratio48.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$2.46Price Target Upside10.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.12
Revenue Forecast (FY)AU$104.71M
Rural Funds Group Business Overview & Revenue Model
Company Description
Rural Funds Group is an agricultural Real Estate Investment Trust (REIT) listed on the ASX under the code RFF. RFF owns a diversified portfolio of Australian agricultural assets which are leased predominantly to corporate agricultural operators. R...
How the Company Makes Money
RFF primarily makes money by owning agricultural properties and earning rental income from leasing those properties to farm operators (tenants). Its key revenue stream is lease income under long-term agreements, which may include fixed rents and, ...
Rural Funds Group Earnings Call Summary
Earnings Call Date:Aug 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 25, 2027
Earnings Call Sentiment Positive
The call presents a mixed but generally constructive picture: strong balance sheet repair and capital management outcomes (significant deleveraging, improved NAV per unit, asset sales at premiums, substantial undrawn headroom, and strong covenant headroom) are offset by operational headwinds (macadamia price decline, dry seasonal crop yield reductions), flat AFFO guidance for FY'27 and increased interest expense. The improvements in liquidity, gearing and proven ability to realize premiums on asset sales provide a positive platform to pursue AFFO-accretive opportunities, but near-term cash earnings growth is constrained.Positive Updates
AFFO and Distributions in Line with Guidance
Adjusted funds from operations (AFFO) of $45.4 million or $0.117 per unit for FY'26, and total distributions of $0.1173 per unit, both in line with prior forecasts.
Negative Updates
Macadamia Price Decline and Farming Headwind
Macadamia price fell from $4.25/kg to $3.80/kg (announced end of July), creating a negative adjustment to accrued farming results and being a primary driver of the FY'27 AFFO headwind.
Read all updates
Q4-2026 Updates
Positive
Negative
AFFO and Distributions in Line with Guidance
Adjusted funds from operations (AFFO) of $45.4 million or $0.117 per unit for FY'26, and total distributions of $0.1173 per unit, both in line with prior forecasts.
Read all positive updates
Company Guidance
Guidance for FY‑27 is unchanged: AFFO of $0.117 per unit and distributions of $0.1173 per unit (forecast payout ratio 100% and a distribution yield of 5.4% based on a $2.18 close). Committed FY‑27 capex is $47m (down from $116m in FY‑26), with pro forma undrawn headroom of ~ $301m within total facilities of $891m and drawn debt of $590m; pro forma gearing falls to 31.8% (from 39.8%), adjusted NAV rises to $3.22/unit (from $3.08), and adjusted total assets are ~ $1.9bn (down $150m). The group has contracted asset sales of ~$317.5m at an average ~18% premium to book (including 8,754ML of water for $74.4m and $234m of cattle sales at ~25% premium), 82.3% of debt hedged/fixed (average hedge maturity 3.3 years, FY‑27 hedge rate ~2.7% falling to ~2.2% by FY‑31/32), pro forma LVR 43.7% (covenant 60%), and interest cover 3.26x (covenant 1.5%); management expects medium‑term capex to decline (≈$30m in FY‑28, minimal by FY‑30) and noted that, absent macadamia price and dryland yield headwinds, AFFO would be nearer ~$0.125/unit.Rural Funds Group Financial Statement Overview
Summary
Income Statement
71
Positive
Balance Sheet
63
Positive
Cash Flow
46
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 140.50M | 113.82M | 95.06M | 98.11M | 85.29M |
| Gross Profit | 79.59M | 87.04M | 67.95M | 69.47M | 66.96M |
| EBITDA | 162.79M | 70.72M | 53.91M | 54.20M | 53.95M |
| Net Income | 114.83M | 31.46M | 83.25M | 94.50M | 209.14M |
Balance Sheet | |||||
| Total Assets | 2.04B | 1.91B | 1.90B | 1.67B | 1.41B |
| Cash, Cash Equivalents and Short-Term Investments | 26.61M | 8.91M | 7.24M | 5.75M | 4.96M |
| Total Debt | 862.44M | 811.05M | 787.74M | 640.61M | 457.82M |
| Total Liabilities | 915.43M | 862.84M | 829.90M | 680.34M | 489.75M |
| Stockholders Equity | 1.13B | 1.06B | 1.08B | 993.16M | 917.01M |
Cash Flow | |||||
| Free Cash Flow | 15.70M | 13.69M | -23.27M | -8.13M | -58.89M |
| Operating Cash Flow | 42.09M | 55.73M | 31.58M | 29.25M | 37.66M |
| Investing Cash Flow | -49.59M | -35.74M | -138.25M | -172.07M | -215.41M |
| Financing Cash Flow | 5.71M | -19.32M | 108.15M | 143.61M | 171.07M |
Rural Funds Group Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | AU$847.37M | 8.98 | 13.71% | 6.47% | 1.05% | 77.00% | |
71 Outperform | AU$657.64M | 9.83 | 12.22% | 3.32% | 7.87% | 33.77% | |
70 Outperform | AU$1.74B | 11.60 | 8.46% | 2.17% | 8.14% | 45.13% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | AU$759.96M | 6.71 | 10.45% | 5.26% | 6.51% | 339.85% | |
62 Neutral | AU$695.34M | 14.82 | -31.66% | ― | 38.59% | ― | |
53 Neutral | AU$1.88B | 33.61 | 8.71% | 0.26% | 8.48% | -32.41% |
* Real Estate Sector Average
AU:RFF
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Rural Funds Group Corporate Events
Rural Funds Group Files Updated Corporate Governance Statement with ASX
Aug 21, 2026
Rural Funds Group has lodged its updated corporate governance statement for the year ended 30 June 2026, confirming compliance with ASX Listing Rules and the Corporate Governance Council’s principles and recommendations. The statement, appro...
Rural Funds Group updates corporate governance and diversity disclosures
Aug 21, 2026
Rural Funds Management has released its updated Corporate Governance Statement for Rural Funds Group as at 30 June 2026, detailing how it applies the ASX Corporate Governance Council’s principles to its externally managed fund structure. The...
Rural Funds Group Details 2026 Results and Asset Sales Strategy
Aug 21, 2026
Rural Funds Group has presented its financial results for the year ended 30 June 2026, outlining performance metrics such as adjusted NAV, AFFO and gearing, and clarifying its income sources from leased and owner-occupied agricultural properties. ...
Rural Funds Group boosts FY26 earnings on premium asset sales and strengthens balance sheet
Aug 21, 2026
Rural Funds Group reported FY26 earnings of $124.1 million, or 31.8 cents per unit, a sharp increase driven by asset sales above book value and favourable interest rate swap revaluations, while net property income rose 5.7% to $100.5 million on hi...
Rural Funds Group Details 2026 Performance and Strategy in Annual Report
Aug 21, 2026
Rural Funds Group has released its annual report for the year ended 30 June 2026, outlining performance and strategy for its agricultural real estate portfolio. The ASX-listed REIT continues to target distribution growth of 4% per annum, with quar...
Rural Funds Group Sets Date for FY26 Results and Investor Webinar
Aug 5, 2026
Rural Funds Management, as responsible entity for Rural Funds Group, will release the FY26 financial results on Friday, 21 August 2026. The announcement will be accompanied by an investor webinar scheduled for 11:00 A.M. AEST on the same day.Inves...
Rural Funds Group Confirms Payment of June Quarter Distribution
Jul 31, 2026
Rural Funds Group is an Australia-listed agricultural real estate investment vehicle, issuing fully paid stapled securities under the ASX code RFF. The group holds agricultural assets via Rural Funds Trust and RF Active, providing investors with e...
Rural Funds Group details tax components of June quarter distribution
Jul 30, 2026
Rural Funds Management has issued an estimated breakdown of Rural Funds Trust’s quarterly distribution for the period ended 30 June 2026, confirming its status as a withholding and Attribution Managed Investment Trust. The notice details tha...
Rural Funds Group highlights asset sales and investor outreach in latest update
Jul 23, 2026
Rural Funds Management Limited, responsible entity for Rural Funds Group, operates as a specialist agricultural fund manager with a substantial portfolio spanning almonds, macadamias, vineyards, poultry, cattle and cropping assets across Australia...
Rural Funds Group Sells Assets at Premium to Cut Debt and Support AFFO
Jul 10, 2026
Rural Funds Management, as responsible entity of Rural Funds Group, has agreed to sell five agricultural assets, including four cattle properties and New South Wales river water entitlements, for a combined $255.6 million, at an average premium of...
Rural Funds Group Lodges Replacement Constitutions for Stapled Trusts
May 26, 2026
Rural Funds Group has released replacement constitutions for Rural Funds Trust and RF Active, which have been lodged with the Australian Securities and Investments Commission. These updated governing documents underpin the structure of the stapled...
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.