Finning International (TSE:FTT)
TSX:FTT
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Finning International
(TSX:FTT)
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Rating:68Neutral
Price Target:
C$112.00
▲(17.35% Upside)
Action:Downgraded
Date:05/15/26
The score is held back primarily by weak and volatile cash conversion despite strong profitability. Offsetting that, technicals are supportive with clear trend strength, and the latest earnings call was broadly positive on backlog and product-support momentum. Valuation is only moderately supportive given a ~23 P/E and ~1.17% yield.
Positive Factors
Exclusive Caterpillar dealership & scale
Finning's exclusive Caterpillar dealership across large territories creates a durable competitive moat. The scale of the installed base supports recurring parts, service, rental and refurbishment revenue streams, anchoring steady aftermarket cash flows and lifecycle monetization.
Negative Factors
Volatile cash generation & weak cash conversion
Large swings in operating cash flow and a dramatic FCF decline signal inconsistent cash conversion from earnings. This raises funding and execution risk for capital needs, dividend sustainability, and buybacks if working-capital or inventory timing pressures persist.
Read all positive and negative factors
Positive Factors
Negative Factors
Exclusive Caterpillar dealership & scale
Finning's exclusive Caterpillar dealership across large territories creates a durable competitive moat. The scale of the installed base supports recurring parts, service, rental and refurbishment revenue streams, anchoring steady aftermarket cash flows and lifecycle monetization.
Read all positive factors
Finning International (FTT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$13.35B
Dividend Yield1.58%
Average Volume (3M)448.79K
Price to Earnings (P/E)23.3
Beta (1Y)1.34
Revenue Growth-6.98%
EPS Growth11.17%
CountryCA
Employees13,188
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)5.10
Shares Outstanding130,564,560
10 Day Avg. Volume342,722
30 Day Avg. Volume448,793
Financial Highlights & Ratios
PEG Ratio3.94
Price to Book (P/B)3.55
Price to Sales (P/S)0.93
P/FCF Ratio20.63
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$113.20Price Target Upside18.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)4.67
Revenue Forecast (FY)C$10.98B
Finning International Business Overview & Revenue Model
Company Description
Finning International Inc. sells, services, and rents heavy equipment, and power and energy systems in Canada, Chile, the United Kingdom, Argentina, and internationally. The company offers telehandlers, articulated trucks, asphalt pavers, backhoe ...
How the Company Makes Money
Finning makes money primarily through a multi-stream dealer model centered on representing Caterpillar in its territories. (1) New equipment sales: It generates revenue by selling new Caterpillar machines and equipment packages to industrial and i...
Finning International Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call highlighted multiple tangible operating strengths — record backlog (+32% YoY), consistent product support growth (+6% globally, +13% in Canada), improved capital efficiency (2.3x turns, ~18.7% ROIC), strong mining and construction order intake, and continued shareholder returns. Offsetting risks are regional softness in South America (notably lower new equipment deliveries), higher compensation-related SG&A items (LTIP and severance), and timing/lead-time uncertainty for data center/prime power projects. On balance, the positives (growth in backlog, product support momentum, healthy balance sheet and shareholder returns) materially outweigh the near-term headwinds.Positive Updates
Strong Adjusted EPS and Revenue
Adjusted EPS of $1.02 in Q1 FY2026, up 7% year-over-year; revenue of $2.5 billion, up 2% versus Q1 2025.
Negative Updates
Regional New and Used Equipment Weakness
Overall new equipment sales down 4% year-over-year; used equipment sales down 13% versus Q1 2025. In Canada, used equipment down 21% (prior-year quarter had higher rental conversions).
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Adjusted EPS and Revenue
Adjusted EPS of $1.02 in Q1 FY2026, up 7% year-over-year; revenue of $2.5 billion, up 2% versus Q1 2025.
Read all positive updates
Company Guidance
Guidance from the call was that Finning expects to deliver the majority of its record equipment backlog of $3.8 billion (up 32% year‑over‑year and +20% sequential), including roughly $1.2 billion of Power & Energy backlog, with most deliveries targeted in 2026 though more than 140 ultra‑class/large trucks remain in backlog into 2027–28 and a 798‑truck Cat Dynamic Energy Transfer trial slated to start in Q2 2026; management expects continued product‑support growth in Canada (Q1 product support +13% in Canada, +6% globally) while South America may see near‑term moderation, labour markets stabilizing through 2028, and expanding Power & Energy/data‑center opportunities (some projects shifting into 2028–29 as engine lead times lengthen). Financially, they reiterated disciplined capital allocation and returns — Q1 revenue $2.5 billion (+2% YoY), adjusted EPS $1.02 (+7% YoY), invested‑capital turns ~2.3x, adjusted ROIC ~18.7%, net debt/adjusted EBITDA ~1.6x — and signaled ongoing cost/capital focus while raising the dividend 7.4% (25th consecutive year).Finning International Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
73
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.64B | 10.59B | 11.21B | 10.53B | 9.28B | 7.29B |
| Gross Profit | 2.44B | 2.37B | 2.48B | 2.50B | 2.22B | 1.80B |
| EBITDA | 1.21B | 1.25B | 1.09B | 1.18B | 975.00M | 729.00M |
| Net Income | 675.00M | 506.00M | 509.00M | 523.00M | 503.00M | 364.00M |
Balance Sheet | ||||||
| Total Assets | 8.34B | 7.80B | 7.73B | 7.56B | 7.27B | 5.97B |
| Cash, Cash Equivalents and Short-Term Investments | 253.00M | 397.00M | 316.00M | 177.00M | 288.00M | 502.00M |
| Total Debt | 2.53B | 2.31B | 2.58B | 2.70B | 2.33B | 1.81B |
| Total Liabilities | 5.46B | 5.01B | 5.09B | 5.03B | 4.81B | 3.63B |
| Stockholders Equity | 2.88B | 2.79B | 2.63B | 2.51B | 2.44B | 2.32B |
Cash Flow | ||||||
| Free Cash Flow | 41.00M | 480.00M | 856.00M | 8.00M | -170.00M | 292.00M |
| Operating Cash Flow | 255.00M | 688.00M | 1.01B | 228.00M | 1.00M | 425.00M |
| Investing Cash Flow | 211.00M | 217.00M | -128.00M | -229.00M | -268.00M | -151.00M |
| Financing Cash Flow | -597.00M | -817.00M | -816.00M | -71.00M | -13.00M | -300.00M |
Finning International Technical Analysis
Positive
95.44
Price Trends
89.05
Positive
83.74
Positive
73.51
Positive
Market Momentum
1.28
Negative
62.13
Neutral
74.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTT, the sentiment is Positive. The current price of 95.44 is above the 20-day moving average (MA) of 87.94, above the 50-day MA of 89.05, and above the 200-day MA of 73.51, indicating a bullish trend. The MACD of 1.28 indicates Negative momentum. The RSI at 62.13 is Neutral, neither overbought nor oversold. The STOCH value of 74.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FTT.
Finning International Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$3.20B | 9.20 | 12.22% | 3.88% | 11.72% | 33.83% | |
74 Outperform | C$18.25B | 42.80 | 16.06% | 1.25% | 4.85% | 4.18% | |
68 Neutral | C$13.35B | 23.26 | 24.05% | 1.58% | -6.98% | 11.17% | |
65 Neutral | C$623.12M | 9.90 | 11.63% | 5.09% | -3.59% | 50.73% | |
64 Neutral | C$13.94B | 39.61 | 52.10% | 0.09% | 16.01% | 776.59% | |
64 Neutral | C$3.47B | -37.51 | 3.71% | 2.38% | 26.30% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TSE:FTT
Finning International
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103.28%
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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.