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Toromont Industries
(TSX:TIH)
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Rating:70Outperform
Price Target:
C$227.00
▲(11.70% Upside)
Action:Upgraded
Date:07/30/26
The score is supported primarily by strong financial quality (solid margins and conservative leverage) and a constructive earnings call with strong backlog, AVL growth runway, and ample liquidity. These positives are tempered by weak near-term technicals (trading below key moving averages) and a relatively expensive valuation (P/E ~33 with a ~1.0% dividend yield), alongside near-term earnings noise and cost pressure from AVL-related commitments and higher investment spending.
Positive Factors
Backlog and AVL Growth
The large backlog provides multi-period revenue visibility, while the major AVL order and rapidly expanding AVL revenues create a durable growth runway. Capacity expansion in Charlotte and Hamilton should support future production and customer demand.
Negative Factors
CIMCO Margin Pressure
CIMCO’s weaker margins and operating income expose consolidated results to execution, project-mix and timing risks. Although some weakness is timing-related, sustained package-margin pressure or higher expenses could limit profitability in the refrigeration segment.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog and AVL Growth
The large backlog provides multi-period revenue visibility, while the major AVL order and rapidly expanding AVL revenues create a durable growth runway. Capacity expansion in Charlotte and Hamilton should support future production and customer demand.
Read all positive factors
Toromont Industries (TIH) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$16.54B
Dividend Yield1.08%
Average Volume (3M)326.28K
Price to Earnings (P/E)32.1
Beta (1Y)0.67
Revenue Growth8.83%
EPS Growth6.15%
CountryCA
Employees7,900
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)6.33
Shares Outstanding81,562,760
10 Day Avg. Volume352,321
30 Day Avg. Volume326,282
Financial Highlights & Ratios
PEG Ratio-23.99
Price to Book (P/B)4.10
Price to Sales (P/S)2.59
P/FCF Ratio26.26
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$248.67Price Target Upside22.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)7.46
Revenue Forecast (FY)C$5.93B
Toromont Industries Business Overview & Revenue Model
Company Description
Established in 1961 and based in Concord, Canada, Toromont Industries Ltd. is a prominent supplier of specialized capital equipment across Canada, the United States, and various international markets. The company operates through two distinct divi...
How the Company Makes Money
Toromont makes money through two main operating segments with multiple recurring revenue streams.
1) Equipment Group (dealership and aftermarket):
- New equipment sales: Revenue is generated from selling heavy equipment to customers (e.g., contra...
Toromont Industries Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial performance: consolidated revenue and operating income grew strongly, the Equipment Group delivered robust sales and bookings (including a sizable AVL-related order), AVL production and ownership expansion provide clear growth runway, and the balance sheet remains very strong with substantial liquidity. Offsetting items include meaningful non-cash purchase-commitment expenses tied to AVL that suppressed reported net earnings and ROE modestly, margin and operating-income weakness at CIMCO tied to project timing and mix, rising SG&A and investment-related costs, and softness in material handling and recreational markets. Management emphasized disciplined execution, investment in technicians and production capacity, and confidence in backlog execution.Positive Updates
Consolidated Revenue and Operating Income Growth
Consolidated revenue increased 16% in Q2 and 15% year-to-date. Operating income increased 41% in the quarter and 42% year-to-date, with operating income as a percent of revenue improving to 13.6% YTD from 11.0% last year.
Negative Updates
CIMCO Revenue and Margin Compression
CIMCO revenue was down 1% in Q2 (up 1% YTD) with package revenue down 5% in Q2. Gross profit margins decreased ~90 basis points in Q2 and ~120 basis points YTD. Operating income at CIMCO declined $3 million (20%) in Q2 and $7 million (26%) YTD, largely due to project timing, lower package margins and higher expense levels.
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Q2-2026 Updates
Positive
Negative
Consolidated Revenue and Operating Income Growth
Consolidated revenue increased 16% in Q2 and 15% year-to-date. Operating income increased 41% in the quarter and 42% year-to-date, with operating income as a percent of revenue improving to 13.6% YTD from 11.0% last year.
Read all positive updates
Company Guidance
Management's guidance for the back half of 2026 emphasized disciplined execution and liquidity support for growth: Toromont finished H1 with $1.2 billion of cash plus $449 million of available credit and a net-debt-to-capitalization of negative 13%, and the Board approved a $0.56 quarterly dividend payable Oct. 2, 2026. They reiterated a long‑term ROE target of 18% (Q2 ROE was 17%, ROCE 24.8%) and noted backlog of roughly $2.9 billion (Equipment backlog largely expected ~60% to deliver in 12 months; CIMCO ~75% in 12 months), while bookings included a $1 billion AVL order largely for 2027. AVL is being scaled rapidly (Q2 AVL revenue $171M, YTD $300M vs. $57M/$79M in 2025), Charlotte is expected near full capacity by Q4 and the new Hamilton site (land cost ~$20M; ~ $75M all‑in build) should add ~40–50% capacity when ramped from mid‑2027; management cautioned that AVL purchase‑commitment expenses (Q2 $54.3M) have temporarily dampened reported ROE by ~1.5%. They reiterated active FX hedging, ongoing technician hiring, and a focus on margin and cash‑disciplined investments while monitoring trade and macro risks.Toromont Industries Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
87
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.56B | 5.20B | 5.02B | 4.62B | 4.12B | 3.89B |
| Gross Profit | 1.48B | 1.32B | 1.26B | 1.24B | 1.12B | 969.77M |
| EBITDA | 1.07B | 1.03B | 917.66M | 922.29M | 793.75M | 627.66M |
| Net Income | 514.99M | 496.59M | 506.52M | 534.71M | 454.20M | 332.71M |
Balance Sheet | ||||||
| Total Assets | 5.75B | 5.47B | 4.87B | 4.57B | 4.18B | 3.58B |
| Cash, Cash Equivalents and Short-Term Investments | 1.19B | 1.33B | 890.82M | 1.04B | 927.78M | 916.83M |
| Total Debt | 853.73M | 851.12M | 689.72M | 682.06M | 670.92M | 665.92M |
| Total Liabilities | 2.31B | 2.18B | 1.91B | 1.89B | 1.86B | 1.63B |
| Stockholders Equity | 3.45B | 3.29B | 2.96B | 2.68B | 2.33B | 1.95B |
Cash Flow | ||||||
| Free Cash Flow | 480.27M | 513.96M | 162.19M | 180.62M | 114.19M | 420.68M |
| Operating Cash Flow | 812.26M | 742.12M | 508.10M | 526.99M | 388.17M | 610.07M |
| Investing Cash Flow | -287.06M | -258.86M | -355.78M | -249.31M | -215.55M | -136.21M |
| Financing Cash Flow | -381.43M | -47.29M | -303.44M | -164.49M | -162.16M | -148.14M |
Toromont Industries Technical Analysis
Neutral
203.22
Price Trends
215.71
Negative
217.10
Negative
200.00
Positive
Market Momentum
-5.07
Negative
46.04
Neutral
70.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TIH, the sentiment is Neutral. The current price of 203.22 is below the 20-day moving average (MA) of 204.39, below the 50-day MA of 215.71, and above the 200-day MA of 200.00, indicating a neutral trend. The MACD of -5.07 indicates Negative momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 70.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:TIH.
Toromont Industries Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$4.20B | 19.37 | 13.09% | 2.30% | 18.28% | 35.28% | |
70 Outperform | C$16.54B | 32.11 | 15.53% | 1.08% | 8.83% | 6.15% | |
64 Neutral | C$2.87B | 28.53 | 24.14% | 0.91% | 16.24% | 10.17% | |
64 Neutral | C$655.37M | 9.95 | 12.07% | 4.73% | -4.10% | 82.03% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$12.30B | 22.38 | 19.22% | 1.34% | 0.31% | 18.50% | |
53 Neutral | C$2.63B | 54.88 | 2.66% | ― | 13.75% | ― |
* Industrials Sector Average
TSE:TIH
Toromont Industries
203.27
58.95
40.84%
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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.