Emeco Holdings Limited (AU:EHL)
ASX:EHL
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Emeco Holdings Limited
(Sydney:EHL)
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Rating:75Outperform
Price Target:
AU$1.50
▲(19.05% Upside)
Action:ReiteratedDate:02/20/26
The score is driven primarily by solid financial performance (strong cash flow, improving margins and deleveraging) and a positive earnings-call outlook with clear capital and ROC targets supported by improved liquidity. Valuation is attractive on a low P/E, while technicals are only moderately supportive due to mixed near-term momentum and elevated stochastic readings.
Positive Factors
Free cash flow strength
Sustained, high free cash flow and 110% cash conversion provide durable funding for fleet renewal, debt reduction and targeted investments (AI/telemetry, maintenance). This underpins financial resilience through cycles, supports deleveraging and preserves strategic optionality for growth or M&A.
Negative Factors
Shift toward lower‑margin maintenance revenue
A sustained shift into lower‑margin maintenance reduces average revenue per hour and compresses gross margins even if ROC benefits. Over time, a persistent lower‑margin mix can limit operating leverage, constrain EBITDA margin expansion and reduce free cash flow upside relative to rental-led growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained, high free cash flow and 110% cash conversion provide durable funding for fleet renewal, debt reduction and targeted investments (AI/telemetry, maintenance). This underpins financial resilience through cycles, supports deleveraging and preserves strategic optionality for growth or M&A.
Read all positive factors
Emeco Holdings Limited (EHL) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$624.68M
Dividend YieldN/A
Average Volume (3M)708.95K
Price to Earnings (P/E)4.1
Beta (1Y)1.04
Revenue Growth-4.54%
EPS Growth43.24%
CountryAU
Employees1,400
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)0.07
Shares Outstanding518,374,760
10 Day Avg. Volume558,899
30 Day Avg. Volume708,948
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)0.60
Price to Sales (P/S)0.55
P/FCF Ratio4.68
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$1.35Price Target Upside7.16% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)0.18
Revenue Forecast (FY)AU$839.42M
Emeco Holdings Limited Business Overview & Revenue Model
Company Description
Emeco Holdings Limited provides heavy earthmoving equipment and mining service solutions in Australia. The company rents trucks, excavators, dozers, loaders, and graders. It is also involved in the maintenance and remanufacturing of various compon...
How the Company Makes Money
EHL makes money primarily by renting heavy earthmoving equipment to mining and infrastructure customers under commercial hire arrangements. Revenue is generated through recurring hire charges (typically priced by time and/or usage, depending on co...
Emeco Holdings Limited Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 26, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial performance: double-digit revenue growth in key segments, robust profit increases, substantial free cash flow growth and meaningful deleveraging supported by a successful refinancing. The business is progressing toward its 20% return on capital target and investing in AI/technology and maintenance services that enhance competitive advantage. Near-term negatives include a shift toward lower-margin maintenance revenue (albeit higher ROC), temporary working capital timing effects, elevated stay-in-business CapEx, redeployment reducing Force external revenue and weather-related utilization risk in Queensland. Overall, the positives (growth, cash generation, balance sheet strength, strategic progress and technology investments) materially outweigh the manageable near-term headwinds.Positive Updates
Revenue Growth
Group revenue increased 9% year-on-year to $421 million in H1 FY26, driven by growth in rental and maintenance services.
Negative Updates
Lower-Margin Revenue Mix
Growth was weighted towards maintenance services which are lower margin (but lower capital intensity); this drove improvements in ROC but reduced average price-per-hour and depreciation-per-hour in the period.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Group revenue increased 9% year-on-year to $421 million in H1 FY26, driven by growth in rental and maintenance services.
Read all positive updates
Company Guidance
Emeco guided FY‑26 stay‑in‑business capital at about $170–175m, depreciation of $160–165m and non‑recurring spend of ~$15m, noting second‑half CapEx will be lower and align with full‑year guidance; management reiterated its 20% return on capital (ROC) target (ROC was 18% in H1) and said the business is expected to deliver ~A$120m of free cash at 18% ROC (rising to ~A$140m at 20% ROC). They flagged balance‑sheet guardrails of 0.5–1.0x target leverage (net leverage ~0.5x at H1), confirmed the new 5‑year A$355m syndicated facility and improved liquidity of ~A$271m (cash A$171m at period end), and reminded markets H1 operating free cash flow was A$67m (up 37%) with 110% cash conversion — while noting H2 performance is expected to be positive but remains subject to wet‑weather risk in Queensland.Emeco Holdings Limited Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
70
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 818.82M | 785.35M | 822.73M | 874.92M | 754.37M | 620.53M |
| Gross Profit | 238.26M | 455.96M | 464.32M | 179.65M | 178.91M | 167.48M |
| EBITDA | 292.32M | 290.35M | 258.19M | 224.52M | 244.31M | 236.44M |
| Net Income | 80.23M | 75.14M | 52.66M | 41.33M | 64.95M | 20.70M |
Balance Sheet | ||||||
| Total Assets | 1.32B | 1.25B | 1.17B | 1.09B | 1.02B | 1.06B |
| Cash, Cash Equivalents and Short-Term Investments | 171.15M | 126.36M | 78.27M | 46.67M | 60.16M | 74.72M |
| Total Debt | 361.04M | 321.33M | 358.74M | 322.65M | 301.06M | 299.21M |
| Total Liabilities | 561.64M | 532.18M | 537.52M | 498.98M | 454.29M | 528.96M |
| Stockholders Equity | 755.52M | 714.82M | 637.24M | 589.44M | 567.22M | 531.41M |
Cash Flow | ||||||
| Free Cash Flow | 105.25M | 92.00M | 22.22M | 26.98M | 50.73M | 51.46M |
| Operating Cash Flow | 280.07M | 253.78M | 237.17M | 206.39M | 221.15M | 205.62M |
| Investing Cash Flow | -161.15M | -149.18M | -201.43M | -180.88M | -169.87M | -149.56M |
| Financing Cash Flow | -57.95M | -56.50M | -4.13M | -38.99M | -65.69M | -179.47M |
Emeco Holdings Limited Technical Analysis
Positive
1.26
Price Trends
1.29
Negative
1.28
Negative
1.16
Positive
Market Momentum
-0.03
Negative
51.81
Neutral
70.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:EHL, the sentiment is Positive. The current price of 1.26 is above the 20-day moving average (MA) of 1.23, below the 50-day MA of 1.29, and above the 200-day MA of 1.16, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 51.81 is Neutral, neither overbought nor oversold. The STOCH value of 70.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:EHL.
Emeco Holdings Limited Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | AU$1.37B | 11.36 | 25.18% | 0.57% | 36.30% | 82.20% | |
75 Outperform | AU$624.68M | 4.12 | 10.91% | ― | -4.54% | 43.24% | |
71 Outperform | AU$68.54M | 3.33 | 7.13% | 1.18% | 2.05% | 259.95% | |
69 Neutral | AU$271.06M | 12.10 | 9.11% | 5.71% | 25.14% | -14.54% | |
65 Neutral | AU$658.93M | 10.83 | 42.55% | 5.24% | 12.96% | 8.19% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | AU$424.23M | 10.20 | 6.54% | 4.73% | -9.67% | -6.49% |
* Industrials Sector Average
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Emeco Holdings Limited Corporate Events
Emeco outlines scope and limitations of investor presentation at Euroz Hartleys Conference
Mar 17, 2026
Emeco Holdings Limited used its appearance at the Euroz Hartleys Conference on Rottnest Island to distribute a high-level investor presentation summarising key aspects of its financial reporting and disclosure practices. The company emphasised tha...
Emeco Redeems $250m Notes Early Under New Syndicated Debt Facility
Jan 19, 2026
Emeco Holdings Limited has redeemed its $250 million Australian Medium Term Notes ahead of their July 2026 maturity, using funds from a new five-year A$355 million revolving syndicated debt facility arranged in November 2025. The new facility, whi...
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.