Reece Limited (REH) AI Stock Analysis

• Market Cap: AU$8.92B
• Dividend Yield: 1.4%
• Average Volume (3M): 959.93K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 1.63
• Revenue Growth: -1.39%
• EPS Growth: -24.40%
• Country: AU
• Employees: 18,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.23
• Shares Outstanding: 615,092,000
• 10 Day Avg. Volume: 1,456,554
• 30 Day Avg. Volume: 959,929
• PEG Ratio: -1.18
• Price to Book (P/B): 2.29
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 27.08
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$16.35
• Price Target Upside: 12.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 0.47
• Revenue Forecast (FY): AU$9.29B

• Rating: 69 Neutral
• Price Target: AU$16.00 ▲(10.34% Upside)
• Action: Reiterated Date: 02/24/26
• Date: Action: Reiterated 02/24/26

The score is driven primarily by solid financial performance (growth and generally stable operating margins), supported by strong technical momentum and an established uptrend. These positives are tempered by a relatively expensive valuation (P/E ~28, low yield) and some emerging financial headwinds from declining net margin and slower free cash flow growth.

Positive Factors

Diversified distribution network

Reece's extensive branch footprint across Australia, New Zealand and the United States creates durable scale in procurement, logistics and customer access. This branch-led model supports recurring trade relationships, high customer retention and local service advantages that sustain revenue and margin resilience over time.

Consistent revenue growth & stable gross margins

Sustained top-line growth alongside stable gross margins indicates effective pricing, product mix control and cost management. These traits translate into predictable gross profit dollars, supporting reinvestment in branches, digital tools and complementary services that reinforce long-term competitive positioning.

Improving leverage and positive operating cash flow

An improving debt profile combined with consistently positive operating cash flow gives the company financial flexibility. That structural cash generation supports capex, targeted acquisitions and working-capital needs, enabling strategic investment without overreliance on external funding.

Negative Factors

Declining net profit margin

A falling net margin suggests pressure below the gross line—higher overheads, integration costs or pricing pressure—that can persistently erode returns. If unchecked, margin compression reduces retained earnings, limits reinvestment capacity and weakens long-term return on equity.

Slowing free cash flow growth

Decelerating free cash flow growth weakens the firm's ability to self-fund expansion, dividends or acquisitions. Over several quarters this can force reliance on debt or equity issuance, constrain strategic flexibility and increase sensitivity to adverse macro shocks that demand liquidity.

Cyclicality tied to construction activity

Revenue and margins are structurally linked to construction and infrastructure cycles, creating demand volatility. Prolonged downturns in building or public works can materially reduce volumes, delay working capital recovery and strain branch-level economics across multiple quarters.

Reece Limited Business Overview & Revenue Model

Company Description

Reece Limited engages in the distribution of plumbing, bathroom, heating, ventilation, air-conditioning, waterworks, and refrigeration products in Australia, the United States, and New Zealand. The company also distributes irrigation and pools, fire, and kitchen products. It serves customers in the trade, retail, commercial, and infrastructure markets. It sells its products under the Reece, Viadux, Actrol, and Metaflex brands. The company was formerly known as Reece Australia Limited and changed its name to Reece Limited in November 2015. Reece Limited was founded in 1919 and is based in Cremorne, Australia.

How the Company Makes Money

Reece primarily makes money by buying products from manufacturers and wholesalers and reselling them at a margin through its branch and distribution network (and supporting digital channels) to plumbers, builders, HVAC-R contractors, and infrastructure/civil customers. Its main revenue stream is product sales across several categories: (1) plumbing and bathroom products for residential and commercial construction and renovation; (2) HVAC-R equipment and parts sold to refrigeration and air-conditioning contractors; and (3) waterworks/civil supplies (e.g., pipes, fittings, valves, drainage, pumping and related components) sold to contractors and utilities for infrastructure and land-development projects. Earnings are influenced by sales volume (linked to construction, renovation and infrastructure activity), product mix (higher- vs lower-margin categories), pricing discipline, and procurement scale. Reece also generates revenue from value-added services that support product sales (such as trade counter service, delivery/logistics, and in-branch/technical support), with the economic benefit typically reflected in overall gross margin and customer retention rather than separately disclosed service fees. In the United States, Reece earns revenue similarly through distribution of plumbing and related products via acquired and operated businesses, with performance affected by regional construction and trade activity as well as integration and scale benefits from its network.

Reece Limited Financial Statement Overview

Summary

Financials are solid overall with consistent revenue growth and generally healthy EBIT/EBITDA margins. Offsetting this strength are the recent decline in net profit margin and weaker free cash flow growth, which raise some quality-of-earnings and reinvestment capacity concerns.

Income Statement

Reece Limited has demonstrated consistent revenue growth, with a notable increase in total revenue over the years. The gross profit margin has remained stable, indicating effective cost management. However, there has been a decline in net profit margin in the latest year, which could be a concern if it continues. The EBIT and EBITDA margins have shown slight fluctuations but remain healthy overall.

Balance Sheet

The company's debt-to-equity ratio has improved over the years, indicating better leverage management. Return on equity has been relatively stable, reflecting consistent profitability. The equity ratio suggests a solid capital structure, although there is room for improvement in reducing debt levels further.

Cash Flow

Operating cash flow has been positive, but there has been a decline in free cash flow growth, which could impact future investments. The operating cash flow to net income ratio indicates efficient cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in maintaining cash reserves.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	9.22B	8.98B	9.10B	8.84B	7.65B	6.27B
Gross Profit	2.62B	2.56B	2.61B	2.51B	2.14B	798.32M
EBITDA	876.67M	863.32M	983.92M	912.41M	820.78M	702.99M
Net Income	280.27M	316.94M	419.17M	387.61M	392.49M	285.60M
Balance Sheet
Total Assets	7.25B	7.42B	7.09B	6.92B	6.61B	6.12B
Cash, Cash Equivalents and Short-Term Investments	185.95M	275.41M	341.38M	372.71M	220.48M	828.97M
Total Debt	3.35B	1.97B	1.83B	1.96B	1.90B	2.01B
Total Liabilities	3.58B	3.37B	3.21B	3.30B	3.29B	3.23B
Stockholders Equity	3.66B	4.05B	3.88B	3.63B	3.32B	2.89B
Cash Flow
Free Cash Flow	346.16M	341.40M	492.93M	588.90M	21.68M	299.00M
Operating Cash Flow	542.84M	599.78M	750.90M	766.38M	221.79M	371.64M
Investing Cash Flow	-278.02M	-342.50M	-243.96M	-309.52M	-280.98M	-67.92M
Financing Cash Flow	-344.78M	-323.53M	-538.80M	-307.12M	-574.66M	-462.13M

Reece Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 14.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:REH, the sentiment is Neutral. The current price of 14.5 is below the 20-day moving average (MA) of 15.08, below the 50-day MA of 14.60, and above the 200-day MA of 13.19, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 44.80 is Neutral, neither overbought nor oversold. The STOCH value of 12.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:REH.

Reece Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REH	69 Neutral	AU$8.92B	14.57	7.27%	1.40%	-1.39%	-24.40%
VNT	64 Neutral	AU$4.44B	18.35	47.41%	3.56%	1.48%	25.46%
NWH	64 Neutral	€2.57B	8.10	7.79%	3.20%	12.18%	-73.81%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SGI	61 Neutral	AU$149.56M	27.44	7.89%	0.74%	24.67%	96.27%
RWC	60 Neutral	$2.36B	11.09	9.42%	2.00%	6.78%	16.25%
BAP	51 Neutral	AU$384.19M	-1.68	-15.07%	6.62%	-3.00%	―

Reece Limited Corporate Events

Reece Director Angela Mentis Increases Indirect Shareholding

Reece Limited has disclosed a change in director Angela Mentis’s indirect shareholding, reflecting an increase in her personal financial stake in the company. Through the Mentis Superannuation Fund, her holding rose from 7,000 to 12,800 ordinary shares following an on-market purchase of 5,800 shares valued at $88,160.

The transaction signals strengthened alignment between the director’s interests and those of shareholders, as it represents additional capital committed to Reece at prevailing market prices. There were no related changes in derivative contracts or other director-related agreements, and the company confirmed the trade did not occur during a closed trading period.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$13.90 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece sets April payment date for interim dividend

Reece Limited has declared a semi-annual dividend of AUD 0.0544 per ordinary fully paid share for the period ending 31 December 2025, reinforcing its pattern of regular shareholder distributions. The dividend will trade ex on 17 March 2026, with a record date of 18 March 2026 and payment scheduled for 1 April 2026, providing investors with clear visibility over near-term cash returns and capital allocation timing.

The announcement underscores the company’s continued commitment to returning capital to shareholders in line with its financial reporting cycle, signalling confidence in its financial position and cash generation. The detailed timetable for ex-dividend, record, and payment dates allows market participants to plan around eligibility for the distribution and assess the stock’s yield profile relative to other income-focused investments.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$14.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece outlines half‑year FY26 results with caution on forward‑looking and non‑IFRS data

Reece Limited released its half‑year FY26 results for the six months ended 31 December 2025, outlining its current activities and financial performance in summary form. The company cautioned investors about relying on forward‑looking statements and non‑IFRS measures, emphasising that reported figures may differ from comparable metrics used by other firms and that non‑IFRS data are unaudited.

The release underscores that Reece has no obligation to update forward‑looking statements, signalling a conservative stance on earnings guidance and market expectations. It also reminds investors to seek independent financial advice and to treat the information as general background, which may limit reliance on this update for detailed valuation or trading decisions.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$14.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece grows revenue but profits slide as housing slowdown bites

Reece Limited reported half-year 2026 sales revenue up 6% to $4.65 billion, driven by network expansion, but like-for-like sales were flat as subdued housing markets in ANZ and the U.S. weighed on demand. Profitability weakened, with EBITDA down 6%, EBIT down 14%, NPAT down 20% to $144 million and EPS falling 19%, while the interim dividend was cut 16% as higher costs, increased depreciation and rising net debt to $1.0 billion pressured returns, even as the company continued strategic investments and returned $401 million to shareholders via buybacks.

The group maintained capital expenditure at 1.8% of sales to support new branches, refurbishments and technology upgrades, pushing the net leverage ratio to 1.5x but leaving the balance sheet described as well capitalised. Management highlighted mixed signs of gradual recovery in ANZ and ongoing affordability pressures in U.S. residential new construction, signalling a cautious outlook with no material improvement in demand expected for the rest of FY26, even as Reece pursues its 2030 strategy and longer-term growth priorities.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$14.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece revenue climbs on network growth as expansion costs hit profit

Reece Group reported mixed interim results for the six months to 31 December 2025, as challenging housing market conditions in Australia, New Zealand and the United States weighed on profitability despite higher sales. Group revenue rose 5.6% to $4.65 billion, driven largely by ongoing network expansion, but higher operating expenses, including labour, digital projects and property costs, compressed margins and led to a 20.3% fall in net profit after tax to $144 million.

Earnings were further impacted by increased depreciation and amortisation from sustained investment in branch growth and strategic initiatives, with EBITDA down 5.7% to $447.7 million and EBIT down 14% to $261.9 million. The company’s ANZ business delivered modest volume growth and a 4% rise in revenue, while the US arm posted 6% sales growth in local currency; however, both regions saw profit decline due to elevated expansion-related costs, prompting a reduced interim dividend of 5.44 cents per share compared with 6.50 cents a year earlier.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$14.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece to Release HY26 Results and Host Investor Webcast in February

Reece Limited has announced it will release its HY26 financial results for the six months ended 31 December 2025 on Monday, 23 February 2026, providing investors with an update on the plumbing and HVAC distributor’s trading performance across its key markets. The company will host a webcast briefing for analysts and investors at 9:00am AEDT on the same day, signalling ongoing engagement with the market ahead of what may be a closely watched update given Reece’s scale and exposure to construction and infrastructure activity in Australia, New Zealand and the United States.

The most recent analyst rating on (AU:REH) stock is a Buy with a A$16.00 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Updates Market on Progress of On‑Market Share Buy‑Back

Reece Limited has been actively executing an on-market share buy-back of its ordinary fully paid shares under a program first notified on 27 November 2025. In its latest update lodged on 30 December 2025, the company reported that it repurchased 41,542 shares on the previous trading day, bringing the cumulative total bought back to 2,752,929 shares, signalling an ongoing capital management initiative that may affect its share count and shareholder value over time.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Updates Market on Progress of On‑Market Share Buy‑Back

Reece Limited has provided an update on its on-market share buy-back program for its ordinary fully paid shares listed on the ASX under the code REH. The company reported that it has repurchased a cumulative 2,750,375 shares prior to the latest trading day and bought back a further 2,554 shares on the previous day, signalling the ongoing execution of its capital management strategy through daily buy-back notifications.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Updates Market on Progress of On-Market Share Buy-Back

Reece Limited has provided an update on its on-market share buy-back program for its ordinary fully paid shares, reporting that it repurchased 8,580 shares on the previous trading day, bringing the cumulative total bought back to 2,741,795 shares since the program’s commencement on 27 November 2025. The ongoing daily disclosures of repurchases reflect the company’s active capital management strategy and provide transparency to shareholders on the scale and pace of the buy-back, which can influence earnings per share, share liquidity and overall market perception of the company’s valuation and balance sheet strength.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Lifts On-Market Buyback to AUD 85 Million

Reece Limited has increased the size of its existing on-market share buyback program, lifting the total value of ordinary shares it may repurchase to up to AUD 85 million. The expanded buyback signals the company’s continued focus on capital management and returning value to shareholders, and may support its share price and earnings-per-share metrics, with implications for investors monitoring its balance sheet strength and capital allocation strategy.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece lifts on-market share buyback to $85m as board signals confidence

Reece Limited has lifted its on-market share buyback target by $50 million to a total of $85 million, underscoring the board’s confidence in the business and its focus on disciplined capital management. The buyback, which began on 12 December 2025 and may run for up to 12 months, will be funded from existing cash reserves and debt facilities, with the scale and timing of purchases determined by market conditions and share price—moves that are likely to support earnings per share and signal a continued commitment to shareholder value while maintaining a conservative balance sheet to fund future growth.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Accelerates On‑Market Share Buy-Back With Nearly 2 Million Shares Repurchased in a Day

Reece Limited has provided an update on its on‑market share buy-back program, confirming that it repurchased 1,991,003 ordinary fully paid shares on the previous trading day, bringing the total number of shares bought back under the current program to 2,741,795 since the initial notification on 27 November 2025. The continued execution of the on‑market buy-back signals the company’s active capital management strategy, which may support earnings per share, influence share price dynamics, and adjust its capital structure, with implications for existing shareholders and market perception of the company’s valuation and financial strength.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Updates Market on Progress of On‑Market Share Buy-Back

Reece Limited has provided an updated notification to the ASX regarding its ongoing on‑market share buy-back program for its ordinary fully paid shares, trading under the code REH. The company reported that it had repurchased a cumulative total of 538,647 shares prior to the latest trading day and bought back a further 212,145 shares on the previous day, underscoring continued execution of its capital management strategy and potential implications for share liquidity and earnings per share for existing investors.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Announces Daily Update on Share Buy-Back Program

Reece Limited announced a daily update regarding its ongoing share buy-back program, revealing the buy-back of 169,040 ordinary fully paid shares on the previous day. The buy-back initiative is aimed at optimizing capital management and is part of the company’s broader strategy to enhance shareholder returns. This move could potentially strengthen the company’s stock performance and reflect confidence in their financial health.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.

Reece Limited Updates on On-Market Buy-Back Program

Reece Limited has announced an update regarding its ongoing on-market buy-back program. As of December 17, 2025, the company has repurchased a total of 369,607 ordinary fully paid securities, with 133,038 bought back on the previous day. This buy-back initiative is part of Reece Limited’s strategy to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (AU:REH) stock is a Hold with a A$12.40 price target. To see the full list of analyst forecasts on Reece Limited stock, see the AU:REH Stock Forecast page.