Reece Limited (REH) AI Stock Analysis

• Market Cap: AU$7.84B
• Dividend Yield: 1.45%
• Average Volume (3M): 697.73K
• Price to Earnings (P/E): 25.8
• Beta (1Y): 1.75
• Revenue Growth: -1.39%
• EPS Growth: -24.40%
• Country: AU
• Employees: 18,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): 0.20
• Shares Outstanding: 617,886,400
• 10 Day Avg. Volume: 669,867
• 30 Day Avg. Volume: 697,733
• 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$12.07
• Price Target Upside: -4.83% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.44
• Revenue Forecast (FY): AU$9.32B

• Rating: 62 Neutral
• Price Target: AU$12.50 ▼(-1.42% Downside)

Reece Limited's overall stock score is driven by its strong financial performance, characterized by consistent revenue growth and stable profitability. However, technical analysis indicates neutral to bearish momentum, and the stock's valuation appears high relative to industry norms. These factors suggest a cautious outlook, with a need for careful monitoring of financial metrics and market trends.

Positive Factors

Revenue Growth

Consistent revenue growth highlights Reece Limited's ability to expand its market presence and adapt to customer needs, supporting long-term business sustainability.

Leverage Management

Improved leverage management enhances financial stability, providing Reece Limited with greater flexibility to invest in growth opportunities and withstand economic fluctuations.

Stable Profitability

Stable profitability through effective cost management ensures Reece Limited can maintain competitive pricing and reinvest in its business, fostering long-term growth.

Negative Factors

Declining Net Profit Margin

A declining net profit margin may signal rising costs or pricing pressures, potentially impacting Reece Limited's ability to generate sustainable profits over time.

Free Cash Flow Growth

Reduced free cash flow growth could limit Reece Limited's capacity to fund new projects or respond to market changes, affecting its long-term competitive position.

Earnings Decline

A significant decline in earnings per share growth suggests challenges in maintaining profitability, which could hinder Reece Limited's ability to deliver shareholder value.

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 Limited generates revenue primarily through the sale of plumbing and bathroom products to trade customers, including plumbers, builders, and contractors. The company's revenue model is based on a mix of direct sales from its extensive branch network and online sales through its e-commerce platform. Key revenue streams include product sales, value-added services, and after-sales support. Additionally, Reece has established relationships with various manufacturers, allowing it to offer a diverse range of high-quality products and maintain competitive pricing. The company's commitment to customer service and its strategic focus on expanding its product offerings further contribute to its earnings.

Reece Limited Financial Statement Overview

Summary

Reece Limited shows a strong financial position with consistent revenue growth and stable profitability. The balance sheet reflects improved leverage and a solid equity base. However, declining net profit margins and free cash flow growth could pose challenges. Continued focus on cost management and cash flow optimization will be crucial for sustaining growth.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.98B	8.98B	9.10B	8.84B	7.65B	6.27B
Gross Profit	2.56B	2.56B	2.61B	2.51B	2.14B	798.32M
EBITDA	823.17M	863.32M	983.92M	912.41M	820.78M	702.99M
Net Income	316.94M	316.94M	419.17M	387.61M	392.49M	285.60M
Balance Sheet
Total Assets	7.42B	7.42B	7.09B	6.92B	6.61B	6.12B
Cash, Cash Equivalents and Short-Term Investments	275.41M	275.41M	341.38M	372.71M	220.48M	828.97M
Total Debt	1.97B	1.97B	1.83B	1.96B	1.90B	2.01B
Total Liabilities	3.37B	3.37B	3.21B	3.30B	3.29B	3.23B
Stockholders Equity	4.05B	4.05B	3.88B	3.63B	3.32B	2.89B
Cash Flow
Free Cash Flow	357.89M	341.40M	492.93M	588.90M	21.68M	299.00M
Operating Cash Flow	599.78M	599.78M	750.90M	766.38M	221.79M	371.64M
Investing Cash Flow	-342.50M	-342.50M	-243.96M	-309.52M	-280.98M	-67.92M
Financing Cash Flow	-323.53M	-323.53M	-538.80M	-307.12M	-574.66M	-462.13M

Reece Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:REH, the sentiment is Positive. The current price of 12.68 is above the 20-day moving average (MA) of 12.49, above the 50-day MA of 11.85, and below the 200-day MA of 13.51, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 60.96 is Neutral, neither overbought nor oversold. The STOCH value of 77.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:REH.

Reece Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNT	73 Outperform	AU$4.85B	19.69	42.87%	3.64%	1.48%	25.46%
SGI	66 Neutral	AU$200.41M	50.95	12.33%	0.75%	24.67%	96.27%
RWC	64 Neutral	$2.78B	14.81	9.42%	2.12%	6.78%	16.25%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
REH	62 Neutral	AU$7.84B	25.79	7.85%	1.45%	-1.39%	-24.40%
NWH	56 Neutral	AU$2.33B	83.66	4.71%	3.25%	12.18%	-73.81%
BAP	54 Neutral	AU$712.77M	25.33	3.40%	6.43%	-3.00%	―

Reece Limited Corporate Events

S&P/ASX Indices December 2025 Quarterly Rebalance Announced

S&P Dow Jones Indices has announced the quarterly rebalance of the S&P/ASX indices, effective before the market opens on December 22, 2025. The S&P/ASX 50 Index will see Lynas Rare Earths Limited and Washington H. Soul Pattinson and Company Limited added, while Amcor PLC and Mirvac Group will be removed. The S&P/ASX 100 Index will add Eagers Automotive Limited and Capricorn Metals Limited, with Reece Limited and Reliance Worldwide Corporation Limited being removed. The S&P/ASX 200 Index will see several additions, including Aussie Broadband Limited and NexGen Energy (Canada) Limited, while companies like Corporate Travel Management Limited and Bapcor Limited will be removed. These changes reflect the dynamic adjustments in the market and could impact the positioning of the involved companies and their stakeholders.

Reece Limited Announces $35 Million On-Market Share Buyback

Reece Limited has announced an on-market share buyback of up to $35 million, following a previous $365 million off-market buyback. This initiative is part of Reece’s strategic capital allocation to enhance shareholder value while maintaining a strong balance sheet for future growth. The buyback will be funded from existing cash and debt facilities and is set to begin on or after December 12, 2025, potentially lasting up to 12 months, depending on market conditions.

Reece Limited Announces 2025 AGM Results

Reece Limited announced the results of its 2025 Annual General Meeting, where several resolutions were carried, including the re-election of directors and the adoption of the remuneration report, despite a significant portion of votes against it. The AGM results reflect the company’s ongoing governance processes and may influence future corporate strategies, particularly given the second strike against the remuneration report.

Reece Limited Focuses on Strategic Growth Amidst Challenging Year

Reece Limited’s 2025 Annual General Meeting highlighted the company’s strategic focus on operational excellence, innovation, and profitable growth, despite a challenging fiscal year with a slight decline in sales and earnings. The company executed a $365 million share buyback to return excess capital to shareholders while maintaining a strong balance sheet, and it is reshaping its Board to bring in new skills and expertise, ensuring long-term success and continuity.

Reece Limited Reports Revenue Growth Amidst Challenging Market Conditions

Reece Limited reported a 1Q FY26 sales revenue increase of 8% to A$2,407 million, driven by network expansion, despite a decline in EBITDA and EBIT due to elevated costs and depreciation. The company added 15 new branches and completed a share buyback, indicating a strategic focus on long-term growth amid subdued housing markets and cost pressures.

Reece Limited Appoints New Director Jacqueline Chow

Reece Limited announced the appointment of Jacqueline Chow as a director effective November 1, 2025. Chow holds 2,500 ordinary shares in the company, reflecting her initial interest as a director. This appointment may influence the company’s strategic direction and governance, potentially impacting stakeholders and market perceptions.

Reece Group Announces 2025 Online AGM

Reece Group has announced that its 2025 Annual General Meeting will be held online on November 21, 2025. The notice of the meeting and proxy form have been sent to shareholders, detailing how to participate, vote, and ask questions. This online meeting format reflects the company’s commitment to accessibility and engagement with its stakeholders.

Reece Limited Appoints Jacqueline Chow as Independent Non-Executive Director

Reece Limited has announced the appointment of Jacqueline Chow as an Independent Non-Executive Director, effective November 1, 2025. Chow, who will also chair the Remuneration Committee, brings over 20 years of corporate leadership experience across various sectors, including industrial, retail, and telecommunications. Her strategic focus on leveraging innovation and technology is expected to drive customer growth, enhancing Reece’s board with her extensive experience and insights.

Reece Limited Completes Significant Buy-Back Program

Reece Limited has announced the final notification of its buy-back program, purchasing a total of 28,097,753 ordinary fully paid securities for a consideration of AUD 365,270,789. This buy-back is part of an equal access scheme, indicating a strategic move to consolidate its share base, potentially enhancing shareholder value and optimizing capital structure.

Reece Limited Completes $365 Million Share Buy-Back

Reece Limited has successfully completed an off-market share buy-back, repurchasing 28.1 million shares at a price of $13.00 each, totaling $365 million. This buy-back represents 4.3% of the company’s issued share capital and allows Reece to return excess capital to shareholders while maintaining a robust balance sheet and funding future growth initiatives.

Reece Limited Updates on Share Buy-Back Program

Reece Limited has announced an update on its off-market share buy-back program, initially disclosed on September 22, 2025. The buy-back, which opened on September 29, allows eligible shareholders to tender shares at prices ranging from $11.00 to $13.00. The demand has been strong, particularly at the higher end of this range, although the final buy-back price and size have yet to be determined. The buy-back aims to repurchase $250 million worth of shares, with the potential to increase to a maximum of $400 million, depending on the board’s discretion. The final details will be announced on October 20, 2025, after the buy-back period closes on October 17, 2025.

Reece Limited Announces Cessation of Performance Rights

Reece Limited has announced the cessation of 30,484 performance rights due to the conditions for these securities not being met or becoming incapable of being satisfied. This development may impact the company’s capital structure and could have implications for its stakeholders, as it reflects on the company’s ability to meet certain performance conditions.

Reece Limited Announces Cessation of Securities

Reece Limited announced the cessation of 2,159 retention rights due to the lapse of conditional rights that were not satisfied. This development may impact the company’s capital structure and could influence investor perceptions regarding the company’s ability to meet certain performance conditions.

Reece Limited Announces $250 Million Share Buy-Back

Reece Limited has announced an off-market share buy-back valued at $250 million, reflecting the Board’s confidence in its long-term strategy and strong financial position. The buy-back, set to occur through a tender process, is part of Reece’s capital allocation strategy to return excess capital to shareholders while maintaining financial flexibility for future growth opportunities. The initiative is open to eligible shareholders in Australia, New Zealand, and other jurisdictions, with the final buy-back price determined by market conditions and shareholder demand.

Reece Limited Announces Strategic $250 Million Share Buy-Back

Reece Limited has announced an off-market buy-back of its ordinary shares, targeting a $250 million buy-back with flexibility up to $400 million, depending on demand and market conditions. This strategic move aims to efficiently return excess capital to shareholders while preserving the company’s ability to fund future growth, reflecting Reece’s robust financial position and commitment to capital management.

Reece Limited Announces Equal Access Share Buy-Back

Reece Limited has announced a new equal access scheme buy-back of its ordinary fully paid shares, as per the notification to the Australian Securities Exchange (ASX). This move is part of the company’s strategic financial management, potentially impacting its share value and providing liquidity options for shareholders.