Metcash Limited (MTS) AI Stock Analysis

• Market Cap: $4.62B
• Dividend Yield: 4.29%
• Average Volume (3M): 3.20M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.60
• Revenue Growth: 8.86%
• EPS Growth: 0.23%
• Country: AU
• Employees: 9,000
• Sector: Consumer Defensive
• Sector Strength: 48
• Industry: Food Distribution
• EPS (TTM): 0.13
• Shares Outstanding: 1,098,989,100
• 10 Day Avg. Volume: 2,837,771
• 30 Day Avg. Volume: 3,197,489
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 3.55
• Enterprise Value/Ebitda: 8.45
• 1Y Price Target: $4.17
• Price Target Upside: -0.71% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 75 Outperform
• Price Target: AU$4.50 ▲(7.14% Upside)

Metcash Limited's strong technical indicators and robust financial performance are the primary drivers of its stock score. The stock's fair valuation and attractive dividend yield further support its investment appeal. However, potential risks include the overbought technical indicators and the need for improved net profit margins.

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 supermarket and convenience retail outlets. The Liquor segment engages in the distribution of liquor products to independent retail outlets and hotels. The Hardware segment distributes hardware products to independent retail outlets; and operates company owned retail stores. The company sells its products under the IGA, Foodland, Mitre 10, Home Hardware, Total Tools, Cellarbrations, IGA Liquor, and the Bottle-O brand names. Metcash Limited was founded in 1920 and is based in Macquarie Park, Australia.

How the Company Makes Money

Metcash generates revenue primarily through its wholesale distribution model, where it purchases products from manufacturers and sells them to independent retailers. The company earns money from the sale of grocery, liquor, and hardware products, and its revenue streams are diversified across these sectors. Key revenue streams include wholesale sales to supermarkets, liquor stores, and hardware outlets, alongside additional income from services such as marketing, logistics, and supply chain management. Significant partnerships with suppliers allow Metcash to negotiate favorable terms and ensure a steady supply of goods, which enhances its profitability. Moreover, Metcash benefits from economies of scale due to its large purchasing volumes, leading to cost efficiencies that can be passed on to retailers, thereby increasing sales volume and revenue.

Metcash Limited Financial Statement Overview

Summary

Metcash Limited shows steady revenue growth and improving gross profit margins. Despite increased leverage, the company maintains a strong return on equity and robust cash flow generation. However, the low net profit margin and challenges in converting operating income into cash suggest areas for improvement.

Income Statement

Metcash Limited has demonstrated consistent revenue growth over the past few years, with a notable increase of 4.7% in the latest year. The gross profit margin has improved steadily, reaching 12.95%, indicating efficient cost management. However, the net profit margin remains relatively low at 1.64%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.16, indicating higher leverage, which could pose a risk if not managed carefully. Return on equity is strong at 17.42%, showcasing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced approach to financing assets.

Cash Flow

Metcash Limited has shown a significant improvement in free cash flow growth, up by 39.86%, which is a positive indicator of financial health. The operating cash flow to net income ratio is relatively low, suggesting potential challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 72.45%, indicating good cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.32B	17.32B	15.91B	15.80B	15.16B	14.32B
Gross Profit	1.51B	2.24B	1.94B	1.81B	1.65B	1.45B
EBITDA	633.90M	701.40M	624.60M	511.80M	467.70M	389.00M
Net Income	283.30M	283.30M	257.20M	259.00M	245.40M	239.00M
Balance Sheet
Total Assets	6.89B	6.89B	5.80B	5.38B	5.20B	4.85B
Cash, Cash Equivalents and Short-Term Investments	87.30M	87.30M	97.30M	89.50M	104.70M	124.60M
Total Debt	1.89B	1.89B	1.41B	1.49B	1.32B	1.03B
Total Liabilities	5.26B	5.26B	4.27B	4.29B	4.11B	3.56B
Stockholders Equity	1.63B	1.63B	1.52B	1.07B	1.08B	1.28B
Cash Flow
Free Cash Flow	390.50M	390.50M	346.70M	220.60M	310.60M	389.90M
Operating Cash Flow	539.00M	539.00M	482.60M	372.70M	432.30M	475.50M
Investing Cash Flow	-518.90M	-482.80M	-287.90M	-156.60M	-121.70M	-171.70M
Financing Cash Flow	-32.60M	-68.70M	-186.90M	-231.30M	-330.50M	-454.30M

Metcash Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:MTS, the sentiment is Positive. The current price of 4.2 is above the 20-day moving average (MA) of 4.13, above the 50-day MA of 3.99, and above the 200-day MA of 3.35, indicating a bullish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 65.32 is Neutral, neither overbought nor oversold. The STOCH value of 70.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:MTS.

Metcash Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTS	75 Outperform	$4.62B	16.25	18.20%	4.29%	8.86%	0.23%
Sector *	63 Neutral	$20.41B	14.67	-2.93%	3.10%	2.04%	-6.12%
WOLWF	―	$22.82B	32.59	18.56%	3.07%	―	―
CLEGF	―	$20.97B	28.68	28.51%	2.25%	―	―
TSRYF	―	$4.18B	14.63	9.13%	4.76%	―	―
IH1	―	€574.69M	10.70	36.84%	―	―	―
B6G	―	€995.29M	41.75	-0.68%	―	―	―

Metcash Limited Corporate Events

Metcash Limited Announces 2025 AGM Date

Metcash Limited has announced that its Annual General Meeting (AGM) for 2025 will be held on September 10, 2025. The company has set July 9, 2025, as the deadline for receiving nominations for director candidates not recommended by the Board. This meeting is a significant event for stakeholders as it will outline the company’s strategic direction and governance for the coming year.

The most recent analyst rating on (AU:MTS) stock is a Hold with a A$3.40 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.

Metcash Appoints New Company Secretary to Strengthen Governance

Metcash Limited has appointed Johanna O’Shea as the new Company Secretary, effective 28 July 2025. This strategic move is expected to enhance the company’s governance and compliance functions, with Johanna bringing over 20 years of experience in similar roles at major financial institutions. Julie Hutton, the current Chief Legal, Risk and Compliance Officer, will step down as Company Secretary but will maintain her oversight of the company secretariat function. This transition aims to strengthen Metcash’s operational efficiency and ensure robust communication with the ASX, potentially benefiting stakeholders through improved corporate governance.

The most recent analyst rating on (AU:MTS) stock is a Hold with a A$3.40 price target. To see the full list of analyst forecasts on Metcash Limited stock, see the AU:MTS Stock Forecast page.

Metcash Limited Announces Cessation of Performance Rights

Metcash Limited announced the cessation of 26,128 performance rights due to unmet conditions, effective April 30, 2025. This development may impact the company’s capital structure and reflects the challenges in meeting performance criteria, potentially affecting stakeholder confidence and market perception.

Metcash Limited Announces Change in Substantial Holder Interests

Metcash Limited has announced a change in the interests of a substantial holder, Ubiqu© Asset Management Pty Ltd. The substantial holder’s voting power has increased from 6.28% to 5.18% due to on-market purchases totaling $37,917,942, affecting 12,092,561 votes. This change signifies a strategic move by Ubiqu© Asset Management Pty Ltd, potentially impacting Metcash Limited’s shareholder dynamics and market positioning.

Metcash Limited Announces Cessation of Securities

Metcash Limited announced the cessation of 72,500 performance rights due to unmet conditions as of February 28, 2025. This development may impact the company’s capital structure and could have implications for stakeholders, reflecting on the company’s operational adjustments in response to performance metrics.

Metcash Limited Announces Director’s Interest Change

Metcash Limited has announced a change in the director’s interest notice, specifically involving Douglas Jones. The change involves an off-market transfer of 223,701 ordinary shares from the director to Kamasco Pty Ltd ATF The Kamasco Family Trust and Kamasco Pty Ltd ATF the D and R Jones Super Fund, both of which the director is a beneficiary. This transaction does not alter the total number of shares held by the director but changes the nature of the holding from direct to indirect, potentially impacting the company’s internal governance and stakeholder perceptions.

Metcash Limited Adopts New Equity Incentive Plan Rules

Metcash Limited has announced the adoption of new Equity Incentive Plan Rules by its board of directors, effective from November 28, 2024. This move is aimed at structuring the company’s employee incentive scheme, potentially impacting its operational dynamics and aligning employee performance with shareholder interests.