Metcash Limited (AU:MTS)
ASX:MTS
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Metcash Limited
(Sydney:MTS)
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Rating:65Neutral
Price Target:
AU$3.00
â–¼(-9.09% Downside)
Action:ReiteratedDate:12/06/25
Metcash Limited's overall score reflects strong financial performance and promising strategic initiatives, tempered by technical bearishness and challenges in certain segments. The company's valuation is fair, with a high dividend yield providing additional appeal. The earnings call provided a balanced view, with both positive growth indicators and notable challenges.
Positive Factors
Strong cash generation and FCF improvement
Material FCF improvement and a near-60% uplift in operating cash flows signal durable cash conversion capability. This strengthens the company's ability to fund investments, deleverage, sustain dividends and absorb shocks without needing frequent external financing.
Negative Factors
Rising financial leverage
An elevated debt-to-equity ratio raises interest and refinancing risk and reduces financial flexibility. Over a multi-month horizon, higher leverage can limit the firm's ability to invest in growth or weather profit volatility without raising additional capital or cutting payouts.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and FCF improvement
Material FCF improvement and a near-60% uplift in operating cash flows signal durable cash conversion capability. This strengthens the company's ability to fund investments, deleverage, sustain dividends and absorb shocks without needing frequent external financing.
Read all positive factors
Metcash Limited (MTS) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$3.28B
Dividend Yield5.47%
Average Volume (3M)4.46M
Price to Earnings (P/E)7.4
Beta (1Y)0.77
Revenue Growth4.74%
EPS Growth6.60%
CountryAU
Employees9,000
SectorConsumer Defensive
Sector Strength42
IndustryFood Distribution
Share Statistics
EPS (TTM)0.12
Shares Outstanding1,099,726,200
10 Day Avg. Volume4,282,426
30 Day Avg. Volume4,458,609
Financial Highlights & Ratios
PEG Ratio-4.12
Price to Book (P/B)2.59
Price to Sales (P/S)0.25
P/FCF Ratio11.33
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$3.51Price Target Upside6.44% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.24
Revenue Forecast (FY)AU$17.31B
Metcash Limited Business Overview & Revenue Model
Company Description
Metcash Limited operates as a wholesale distribution and marketing company in Australia and New Zealand. It operates through Food, Liquor, and Hardware segments. The Food segment distributes a range of products and services to independent supermar...
How the Company Makes Money
Metcash makes money mainly by acting as a wholesaler and distributor to independent retailers, earning revenue from the sale and delivery of products into stores across its operating segments. Its key revenue streams include: (1) Wholesale product...
Metcash Limited Earnings Call Summary
Earnings Call Date:Nov 30, 2025
(Q2-2026)
| Next Earnings Date:Jun 29, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed view with strong cash performance, growth in Food and Convenience segments, and digital transformation initiatives standing out positively. However, significant challenges persisted in the form of declining tobacco sales, margin pressures in Liquor, and regional difficulties in the Hardware segment. Integration and strategy costs also weighed on the results.Positive Updates
Strong Cash Performance
The group demonstrated a robust cash performance with a 3-year rolling cash realization ratio of 106% and an increase in operating cash flows by almost 60%.
Negative Updates
Tobacco Sales Decline
The tobacco segment experienced a significant decline impacting overall sales growth, attributed to the rise of illicit operators and regulatory changes.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Cash Performance
The group demonstrated a robust cash performance with a 3-year rolling cash realization ratio of 106% and an increase in operating cash flows by almost 60%.
Read all positive updates
Company Guidance
During the Metcash 2026 Half Year Results Briefing, several key metrics and strategic insights were shared by Doug Jones, CEO, and Deepa Sita, CFO. The company reported a 4.5% growth in sales excluding tobacco, and a total revenue of $9.6 billion, with EBITDA increasing by 2% or 4.3% when excluding once-off integration and strategy costs. The group achieved an EBIT of $240.2 million and underlying earnings of $126.7 million, equivalent to $0.115 per share. Despite challenges in the market, Metcash maintained a strong cash performance with a 60% increase in operating cash flows and declared a fully franked dividend of $0.085 per share. The Group's debt leverage ratio was reported at 1x, at the low end of their target range. In Food, earnings grew by 9.8% at the EBITDA level and 3.6% at the EBIT level, while Liquor and Hardware segments showed resilience with strategic initiatives driving market share gains. The integration of Total Tools and the Hardware Group, along with the Foodservice & Convenience business, continued to progress positively, contributing to a diversified revenue base. Additionally, the Sorted platform is expected to become a significant B2B digital marketplace, representing over 30% of group revenue by early 2026. Overall, Metcash remains well-positioned for structural growth, backed by strong operational execution and strategic investments.Metcash Limited Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Apr 2024 | Apr 2023 | Apr 2022 | Apr 2021 | Apr 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.33B | 17.32B | 15.91B | 15.80B | 15.16B | 14.32B |
| Gross Profit | 844.00M | 2.24B | 1.94B | 1.81B | 1.65B | 1.45B |
| EBITDA | 736.50M | 701.40M | 624.60M | 511.80M | 467.70M | 389.00M |
| Net Income | 283.70M | 283.30M | 257.20M | 259.00M | 245.40M | 239.00M |
Balance Sheet | ||||||
| Total Assets | 7.18B | 6.89B | 5.80B | 5.38B | 5.20B | 4.85B |
| Cash, Cash Equivalents and Short-Term Investments | 91.00M | 87.30M | 97.30M | 89.50M | 104.70M | 124.60M |
| Total Debt | 1.88B | 1.89B | 1.41B | 1.49B | 1.32B | 1.03B |
| Total Liabilities | 5.51B | 5.26B | 4.27B | 4.29B | 4.11B | 3.56B |
| Stockholders Equity | 1.66B | 1.63B | 1.52B | 1.07B | 1.08B | 1.28B |
Cash Flow | ||||||
| Free Cash Flow | 476.50M | 390.50M | 346.70M | 220.60M | 310.60M | 389.90M |
| Operating Cash Flow | 637.30M | 539.00M | 482.60M | 372.70M | 432.30M | 475.50M |
| Investing Cash Flow | -123.70M | -482.80M | -287.90M | -156.60M | -121.70M | -171.70M |
| Financing Cash Flow | -517.70M | -68.70M | -186.90M | -231.30M | -330.50M | -454.30M |
Metcash Limited Technical Analysis
Negative
3.30
Price Trends
3.17
Negative
3.30
Negative
3.56
Negative
Market Momentum
-0.06
Negative
41.65
Neutral
64.00
Neutral
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 3.3 is above the 20-day moving average (MA) of 2.97, above the 50-day MA of 3.17, and below the 200-day MA of 3.56, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 41.65 is Neutral, neither overbought nor oversold. The STOCH value of 64.00 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | AU$3.28B | 7.36 | 17.24% | 5.47% | 4.74% | 6.60% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | AU$29.62B | 14.02 | 26.38% | 3.24% | 1.84% | -3.62% | |
60 Neutral | AU$746.06M | 12.78 | 21.20% | 7.63% | -3.36% | -11.53% | |
57 Neutral | AU$3.04B | -1.63 | -10.03% | 7.42% | 6.47% | 281.30% | |
55 Neutral | AU$44.46B | 23.98 | 12.60% | 2.86% | 1.70% | 796.48% | |
51 Neutral | AU$1.85B | 9.86 | 0.82% | 1.95% | 0.49% | -127.84% |
* Consumer Defensive Sector Average
AU:MTS
Metcash Limited
2.97
-0.06
-2.14%
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37.01
7.73
26.41%
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15.23%
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3.73
-4.99
-57.23%
AU:ING
Inghams Group Ltd.
2.02
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-32.51%
AU:BGA
Bega Cheese Limited
6.02
0.85
16.55%
Metcash Limited Corporate Events
Metcash Tightens Governance After Late Director Interest Disclosure
Mar 3, 2026
Metcash has disclosed that it lodged an Appendix 3Y notice for non‑executive director Marina Go outside the timeframe required by ASX Listing Rule 3.19A, after a delay in identifying share acquisitions through its dividend reinvestment plan ...
Metcash to Issue 33,244 Unquoted Performance Rights Under Employee Incentive Plan
Feb 6, 2026
Metcash Limited has notified the market of the planned issue of 33,244 unquoted performance rights (security code MTSAK) under its employee incentive scheme, with an issue date of 19 December 2025. The move reflects the company’s continued u...
Metcash appoints Bruce Sabatta to lead merged Foodservice & Convenience arm
Jan 27, 2026
Metcash Limited has appointed Bruce Sabatta as Chief Executive Officer of its recently merged Foodservice Convenience business, effective 2 March 2026, succeeding Superior Foods founder Craig Phillips, who will move into an advisory role. Sabatta...
Metcash Seeks ASX Quotation for 737,001 New Shares Issued Under Distribution Plan
Jan 26, 2026
Metcash Limited has applied to the ASX for quotation of 737,001 new fully paid ordinary shares to be issued on 28 January 2026 under a dividend or distribution plan. The additional securities modestly increase the company’s listed capital ba...
Metcash CEO Doug Jones Sells Shares to Meet Tax Obligations, Remains Above Minimum Holding
Jan 21, 2026
Metcash Limited has lodged an Appendix 3Y notice with the ASX detailing a change in the interests of its Group CEO, Doug Jones, following the sale of ordinary shares held indirectly via a family trust. The company said the disposal was undertaken ...
Metcash Updates Dividend Details and DRP Pricing for October 2025 Period
Jan 18, 2026
Metcash Limited has updated its dividend notification for its ordinary fully paid shares, confirming details related to a distribution for the six‑month period ended 31 October 2025. The update, lodged on 19 January 2026, amends an earlier a...
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.