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Metcash Limited
(Sydney:MTS)
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Rating:62Neutral
Price Target:
AU$3.00
â–²(3.45% Upside)
Action:Reiterated
Date:06/24/26
The score is driven primarily by stable-but-thin financial performance (growth with margin sensitivity and moderate leverage). Valuation is a clear positive (moderate P/E and strong dividend yield), while technicals are mixed and do not show strong momentum. Earnings call commentary is moderately positive on cash conversion and strategy progress, tempered by margin and cost headwinds (hardware pressure, tobacco impacts, higher D&A and finance costs).
Positive Factors
Strong cash generation & conversion
Consistent, high-quality cash flow and a three‑year cash realisation above target materially strengthen Metcash’s durable funding capacity. This supports dividends, funds Project Horizon and store acquisitions, and provides a buffer against margin swings in a low‑margin distribution model.
Negative Factors
Structurally thin margins
Metcash operates a low‑margin distribution model where small gross‑margin swings materially affect profits. Persistent thin net margins limit reinvestment capacity and increase sensitivity to supplier terms, cost inflation, or operational disruption over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation & conversion
Consistent, high-quality cash flow and a three‑year cash realisation above target materially strengthen Metcash’s durable funding capacity. This supports dividends, funds Project Horizon and store acquisitions, and provides a buffer against margin swings in a low‑margin distribution model.
Read all positive factors
Metcash Limited (MTS) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$3.24B
Dividend Yield5.47%
Average Volume (3M)4.46M
Price to Earnings (P/E)11.8
Beta (1Y)0.76
Revenue Growth0.18%
EPS Growth-1.74%
CountryAU
Employees9,000
SectorConsumer Defensive
Sector Strength42
IndustryFood Distribution
Share Statistics
EPS (TTM)0.25
Shares Outstanding1,099,726,200
10 Day Avg. Volume4,282,426
30 Day Avg. Volume4,458,609
Financial Highlights & Ratios
PEG Ratio-2.83
Price to Book (P/B)1.75
Price to Sales (P/S)0.17
P/FCF Ratio7.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$3.32Price Target Upside14.66% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)0.26
Revenue Forecast (FY)AU$17.62B
Metcash Limited Business Overview & Revenue Model
Company Description
Metcash Limited functions as a leading wholesale distribution and marketing enterprise with operations spanning both Australia and New Zealand. The company's activities are organized into three primary business units: Food, Liquor, and Hardware. I...
How the Company Makes Money
Metcash makes money mainly by acting as a wholesaler and distributor to independent retailers. Its primary revenue stream is the sale of goods to retailers across its Food, Liquor, and Hardware segments: it purchases products from suppliers, then ...
Metcash Limited Earnings Call Summary
Earnings Call Date:Jun 21, 2026
(Q4-2026)
| Next Earnings Date:Dec 07, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly constructive picture: resilient underlying revenue growth (3.8% ex-tobacco), EBITDA expansion (3.5%), strong cash conversion (three-year cash realisation ~104%), and active strategic progress (Project Horizon, retail media partnership, retail ownership rollout). Offsetting these positives are notable cyclical and structural headwinds—hardware retail margins under pressure, the material decline in tobacco sales (AUD 1.8 billion lost revenue; ~AUD 25m earnings impact), an FY27 AUD 10m excise-related headwind, and rising depreciation and finance costs. Management emphasised disciplined capital allocation, cost savings actions, and platform resilience, suggesting the positives outweigh the negatives in the near term.Positive Updates
Revenue Growth (Excluding Tobacco)
Group revenue was AUD 19.6 billion, growing 3.8% excluding tobacco, demonstrating underlying top-line momentum across core businesses.
Negative Updates
Hardware Retail Margin Pressure
Hardware retail margins remain below mid-cycle targets due to weak trade/building activity (notably Victoria and Tasmania). While wholesale is stable, retail earnings are under pressure and overall Hardware EBIT is below desired levels.
Read all updates
Q4-2026 Updates
Positive
Negative
Revenue Growth (Excluding Tobacco)
Group revenue was AUD 19.6 billion, growing 3.8% excluding tobacco, demonstrating underlying top-line momentum across core businesses.
Read all positive updates
Company Guidance
Management guided that the group enters FY2027 from a position of strength after FY2026 revenue of AUD 19.6bn (up 3.8% excl. tobacco), EBITDA before strategy & integration of AUD 774m, operating cash flow of AUD 558m and a three‑year cash realization ratio of 104.2% (target 80–90%); leverage is around 1x with closing net debt AUD 616.6m and committed facilities of AUD 1.57bn (≈AUD 967m undrawn). For FY2027 they expect CapEx of ~AUD 150m (ex‑acquisitions), depreciation & amortization to increase by a low double‑digit percentage as Project Horizon assets come on stream, corporate costs of ~AUD 20–22m per half, net finance costs of ~AUD 130–135m, and Project Horizon’s first final deployment planned in Q4 2026 (with cost guidance unchanged if the second deployment proceeds safely). Capital management guidance included a total FY26 dividend of AUD 0.18/share (final AUD 0.095), ~74% payout ratio and suspension of the DRP; other noted metrics: ROFE ~20%, FY26 investment spend ~AUD 244m, FY26 CapEx AUD 175m, food EBIT AUD 261.8m (up 5.4%, margin 2.5% +14bps), hardware revenue (incl. charge‑through) AUD 3.7bn (+4.3%), an expected ~AUD 10m FY27 hit to food earnings from removal of the accelerated tobacco excise, and management targets AUD 25m of cost savings (AUD 15m people, AUD 10m procurement).Metcash Limited Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
55
Neutral
Cash Flow
58
Neutral
| Breakdown | Apr 2026 | Apr 2025 | Apr 2024 | Apr 2022 | Apr 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.35B | 17.32B | 15.91B | 15.80B | 15.16B |
| Gross Profit | 858.20M | 2.24B | 1.94B | 1.81B | 1.65B |
| EBITDA | 723.50M | 701.40M | 624.60M | 511.80M | 467.70M |
| Net Income | 279.10M | 283.30M | 257.20M | 259.00M | 245.40M |
Balance Sheet | |||||
| Total Assets | 7.00B | 6.89B | 5.80B | 5.38B | 5.20B |
| Cash, Cash Equivalents and Short-Term Investments | 67.20M | 87.30M | 97.30M | 89.50M | 104.70M |
| Total Debt | 1.90B | 1.89B | 1.41B | 1.49B | 1.32B |
| Total Liabilities | 5.27B | 5.26B | 4.27B | 4.29B | 4.11B |
| Stockholders Equity | 1.71B | 1.63B | 1.52B | 1.07B | 1.08B |
Cash Flow | |||||
| Free Cash Flow | 382.80M | 390.50M | 346.70M | 220.60M | 310.60M |
| Operating Cash Flow | 558.00M | 539.00M | 482.60M | 372.70M | 432.30M |
| Investing Cash Flow | -212.30M | -482.80M | -287.90M | -156.60M | -121.70M |
| Financing Cash Flow | -363.30M | -68.70M | -186.90M | -231.30M | -330.50M |
Metcash Limited Technical Analysis
Negative
2.90
Price Trends
2.97
Negative
3.04
Negative
3.29
Negative
Market Momentum
>-0.01
Positive
39.84
Neutral
15.15
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:MTS, the sentiment is Negative. The current price of 2.9 is below the 20-day moving average (MA) of 3.09, below the 50-day MA of 2.97, and below the 200-day MA of 3.29, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 39.84 is Neutral, neither overbought nor oversold. The STOCH value of 15.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:MTS.
Metcash Limited Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | AU$5.84B | 15.37 | 9.59% | 5.12% | -1.17% | -18.45% | |
63 Neutral | AU$3.84B | -8.98 | -10.03% | 7.42% | -10.96% | -383.84% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | AU$3.24B | 11.80 | 17.24% | 5.47% | 0.18% | -1.74% | |
62 Neutral | AU$32.73B | 32.07 | 26.38% | 3.24% | 1.26% | -8.33% | |
54 Neutral | AU$48.70B | 81.69 | 12.60% | 2.86% | 1.54% | -63.29% | |
51 Neutral | AU$1.80B | 294.00 | 0.82% | 1.95% | 1.47% | -76.20% |
* Consumer Defensive Sector Average
AU:MTS
Metcash Limited
2.95
-0.80
-21.31%
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31.78%
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20.63%
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Treasury Wine Estates Limited
4.76
-2.92
-38.01%
AU:BGA
Bega Cheese Limited
5.88
0.49
9.07%
AU:EDV
Endeavour Group Ltd
3.25
-0.63
-16.30%
Metcash Limited Corporate Events
Metcash posts resilient FY26 results on strong cash generation and disciplined strategy
Jun 21, 2026
Metcash Limited reported a resilient FY26 performance, highlighting the strength of its independent retail platform and diversified portfolio despite challenging trading conditions. The group continued to execute its long-term strategy with a focu...
Metcash posts modest revenue growth as food arm outperforms and dividend confirmed
Jun 21, 2026
Metcash reported modest top-line growth for the year to 30 April 2026, with group sales revenue edging up 0.2% to $17.35bn and total revenue including charge-through rising 0.7% to $19.63bn, driven by gains in food, liquor and hardware and tools. ...
Metcash refreshes board with appointment of Nicky Sparshott and retirement of Helen Nash
Jun 18, 2026
Metcash has appointed experienced fast-moving consumer goods and retail executive Nicky Sparshott as a non-executive director from 1 July 2026, as part of a broader board renewal strategy. Sparshott, a former Unilever senior executive and current ...
Metcash dropped from S&P/ASX 100 as index rebalance favours energy and resources
Jun 5, 2026
Metcash faces a setback to its market profile after SP Dow Jones Indices confirmed that Metcash Limited will be removed from the SP/ASX 100 Index at the June 2026 quarterly rebalance, effective before trading on 22 June. The reshuffle, which leave...
Metcash flags resilient FY26 profit as cost cuts bolster outlook
May 10, 2026
Metcash expects underlying profit after tax of $268 million to $270 million for the year to 30 April 2026, underpinned by modest group revenue growth of 0.7% or 3.8% excluding tobacco and resilient performances in its Food and Liquor divisions. Li...
Metcash reports lapse of performance rights and adjustment to issued capital
May 8, 2026
Metcash Limited has reported the lapse of 31,230 performance rights, recorded as a cessation of securities under ASX rules. The rights lapsed on 22 April 2026 because the conditions attached to these conditional rights were not met or became incap...
Metcash Cancels 23,724 Lapsed Performance Rights After Hurdles Missed
May 8, 2026
Metcash Limited has notified the market of the cessation of 23,724 performance rights with the ASX code MTSAK, following the lapse of conditional rights that could no longer be satisfied as of 27 February 2026. The adjustment to its issued capital...
Metcash Reports Lapse of 9,618 Performance Rights
May 8, 2026
Metcash Limited has reported the lapse of 9,618 performance rights, which ceased on 20 February 2026 after the conditions for conversion into securities were not, or could no longer be, satisfied. The cessation slightly reduces the company’s...
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.