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Rural Funds Group
(Sydney:RFF)
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Rating:65Neutral
Price Target:
AU$2.50
▲(12.61% Upside)
Action:Reiterated
Date:02/20/26
The score is driven primarily by stable but mixed financial performance (good margins and balance sheet offset by weakening growth and cash conversion) and a balanced earnings-call outlook (guidance reaffirmed, but leverage/interest costs and reliance on asset sales constrain upside). Technicals are supportive and help the score, while valuation is a headwind due to the high P/E despite the strong yield.
Positive Factors
Long‑dated Leases & High WALE
A WALE of 13.2 years and 83% leased provides durable, contractually-backed rental cash flows that smooth income through agricultural cycles. Long leases reduce vacancy risk and support predictable distributions and financing capacity over the medium term.
Negative Factors
Elevated Gearing
Gearing above the target range increases interest‑rate and refinancing vulnerability and limits financial flexibility. Management must execute significant asset sales to hit target leverage, creating execution and timing risk that can pressure distributions if delayed.
Read all positive and negative factors
Positive Factors
Negative Factors
Long‑dated Leases & High WALE
A WALE of 13.2 years and 83% leased provides durable, contractually-backed rental cash flows that smooth income through agricultural cycles. Long leases reduce vacancy risk and support predictable distributions and financing capacity over the medium term.
Read all positive factors
Rural Funds Group (RFF) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$845.70M
Dividend Yield5.41%
Average Volume (3M)791.66K
Price to Earnings (P/E)13.9
Beta (1Y)0.42
Revenue Growth14.44%
EPS Growth25.32%
CountryAU
Employees260
SectorReal Estate
Sector Strength53
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.16
Shares Outstanding389,723,000
10 Day Avg. Volume501,222
30 Day Avg. Volume791,660
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)0.65
Price to Sales (P/S)6.02
P/FCF Ratio50.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$2.47Price Target Upside11.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.12
Revenue Forecast (FY)AU$124.63M
Rural Funds Group Business Overview & Revenue Model
Company Description
Rural Funds Group is an agricultural Real Estate Investment Trust (REIT) listed on the ASX under the code RFF. RFF owns a diversified portfolio of Australian agricultural assets which are leased predominantly to corporate agricultural operators. R...
How the Company Makes Money
RFF makes money primarily by earning rental income from leasing its agricultural properties to tenants (farm operators) under contractual lease agreements. These leases typically provide recurring base rent payments and may include annual rent esc...
Rural Funds Group Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 21, 2026
Earnings Call Sentiment Neutral
The call presented a mix of solid operational and capital-management progress — AFFO in line with guidance, net property income up 7%, completed developments, successful asset sales (some at premiums), and a modest NAV uptick. However, higher cash interest costs, pro forma gearing above the target range (39.1%), dependence on further asset sales and unitholder approvals, low yields on natural-resource assets, and the fact that much of the half’s earnings uplift was noncash mean material execution and macro risks remain. Overall the positives and negatives are balanced: the business is stable with clear remediation plans, but near-term constraints (leverage, interest costs, payout ratio) temper upside.Positive Updates
Net Property Income Growth
Net property income from leased assets increased by $3.0 million (up 7%) to $49.0 million, driven by additional rent from developed macadamia orchards and annual lease indexation.
Negative Updates
Higher Interest Expense
Interest expense increased by approximately $4.0 million in the half, largely because less interest could be capitalized following the completion of several development projects (raising running interest cost).
Read all updates
Q2-2026 Updates
Positive
Negative
Net Property Income Growth
Net property income from leased assets increased by $3.0 million (up 7%) to $49.0 million, driven by additional rent from developed macadamia orchards and annual lease indexation.
Read all positive updates
Company Guidance
RFF reaffirmed full‑year AFFO and distribution guidance: H1 AFFO was $21.5m ($0.55/unit) and H1 distributions totaled $0.0587/unit, with AFFO skewed to H2 as farming income rises from $1.1m in H1 to just over $5m FY (≈$4m in H2). Adjusted NAV was $3.10/unit (+$0.02), pro‑forma gearing ~39.1% (target 30–35%) with $70m development CapEx deployed in H1 and FY27 CapEx materially lower; management plans to reduce gearing via asset sales (sold ~$60m in the period, targeting $200–260m of disposals over ~12 months, with ~$20–22m high‑security water remaining; two sugarcane farms sold ~10% above book and water sold at adjusted book value, ~2.5x purchase price). Core debt facility refinance extended tenor and cut margins ~5–10bp, interest expense rose ~$4m due to less capitalizable interest, debt is ~60–70% hedged (hedges locked through FY29), and a proposed J&F guarantee increase (docs due Mar‑26) could add up to ~$0.01/unit of AFFO if fully utilised.Rural Funds Group Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 121.19M | 113.82M | 95.06M | 98.11M | 85.29M | 70.97M |
| Gross Profit | 64.41M | 87.04M | 67.95M | 69.47M | 66.96M | 62.82M |
| EBITDA | 111.36M | 70.72M | 53.91M | 54.20M | 53.95M | 51.24M |
| Net Income | 61.35M | 31.46M | 83.25M | 94.50M | 209.14M | 119.63M |
Balance Sheet | ||||||
| Total Assets | 1.97B | 1.91B | 1.90B | 1.67B | 1.41B | 1.05B |
| Cash, Cash Equivalents and Short-Term Investments | 10.93M | 8.91M | 7.24M | 5.75M | 4.96M | 11.65M |
| Total Debt | 847.87M | 811.05M | 787.74M | 640.61M | 457.82M | 346.60M |
| Total Liabilities | 904.81M | 862.84M | 829.90M | 680.34M | 489.75M | 397.21M |
| Stockholders Equity | 1.07B | 1.06B | 1.08B | 993.16M | 917.01M | 648.54M |
Cash Flow | ||||||
| Free Cash Flow | 35.51M | 13.69M | -23.27M | -8.13M | -58.89M | 15.77M |
| Operating Cash Flow | 58.79M | 55.73M | 31.58M | 29.25M | 37.66M | 35.47M |
| Investing Cash Flow | -68.81M | -35.74M | -138.25M | -172.07M | -215.41M | -41.66M |
| Financing Cash Flow | 13.94M | -19.32M | 108.15M | 143.61M | 171.07M | 12.75M |
Rural Funds Group Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | AU$833.32M | 9.83 | 13.71% | 6.47% | 45.30% | 82.35% | |
70 Outperform | AU$1.78B | 12.85 | 8.46% | 2.17% | -2.09% | 133.93% | |
69 Neutral | AU$596.38M | 8.06 | 14.27% | 3.32% | 13.87% | 36.54% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | AU$845.70M | 13.92 | 5.76% | 5.26% | 14.44% | 25.32% | |
53 Neutral | AU$1.68B | 34.89 | 22.46% | 0.26% | 6.03% | -13.41% | |
48 Neutral | AU$618.75M | -3.05 | -31.66% | ― | -46.34% | -474.61% |
* Real Estate Sector Average
AU:RFF
Rural Funds Group
2.20
0.47
27.17%
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Ingenia Communities Group
4.50
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Cedar Woods Properties Limited
6.92
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-0.57%
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16.67%
AU:GLF
Gemlife Communities Group
4.42
0.03
0.71%
Rural Funds Group Corporate Events
Rural Funds Group Confirms Payment of June Quarter Distribution
Jul 31, 2026
Rural Funds Group is an Australia-listed agricultural real estate investment vehicle, issuing fully paid stapled securities under the ASX code RFF. The group holds agricultural assets via Rural Funds Trust and RF Active, providing investors with e...
Rural Funds Group details tax components of June quarter distribution
Jul 30, 2026
Rural Funds Management has issued an estimated breakdown of Rural Funds Trust’s quarterly distribution for the period ended 30 June 2026, confirming its status as a withholding and Attribution Managed Investment Trust. The notice details tha...
Rural Funds Group highlights asset sales and investor outreach in latest update
Jul 23, 2026
Rural Funds Management Limited, responsible entity for Rural Funds Group, operates as a specialist agricultural fund manager with a substantial portfolio spanning almonds, macadamias, vineyards, poultry, cattle and cropping assets across Australia...
Rural Funds Group Sells Assets at Premium to Cut Debt and Support AFFO
Jul 10, 2026
Rural Funds Management, as responsible entity of Rural Funds Group, has agreed to sell five agricultural assets, including four cattle properties and New South Wales river water entitlements, for a combined $255.6 million, at an average premium of...
Rural Funds Group Lodges Replacement Constitutions for Stapled Trusts
May 26, 2026
Rural Funds Group has released replacement constitutions for Rural Funds Trust and RF Active, which have been lodged with the Australian Securities and Investments Commission. These updated governing documents underpin the structure of the stapled...
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.