Finning International (FTT) AI Stock Analysis

• Market Cap: C$7.79B
• Dividend Yield: 2.08%
• Average Volume (3M): 517.45K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 1.44
• Revenue Growth: 6.61%
• EPS Growth: 1.87%
• Country: CA
• Employees: 13,188
• Sector: Industrials
• Sector Strength: 86
• Industry: Industrial - Distribution
• EPS (TTM): 0.99
• Shares Outstanding: 133,717,130
• 10 Day Avg. Volume: 511,770
• 30 Day Avg. Volume: 517,450
• PEG Ratio: -7.45
• Price to Book (P/B): 2.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.94
• 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: C$56.29
• Price Target Upside: -3.40% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 79 Outperform
• Price Target: C$64.00 ▲(9.83%Upside)

Finning International's overall stock score reflects strong financial performance and positive earnings call outcomes. The stock's technical indicators show bullish momentum, though caution is advised due to potential overbought conditions. Valuation is reasonable, and recent corporate events support strategic growth.

Positive Factors

Earnings Expectations

Earnings are expected to remain well above historical levels due to improving demand underpinned by healthy commodity prices, robust infrastructure spending, and growing needs for power systems.

Risk/Reward

The risk/reward skews very favourably, though some patience may be required for the upside to be realized.

Valuation

Valuation is at the low end of its historical range and attractive compared to peers.

Negative Factors

Adjusted EBIT Margins

The step-down in Adjusted EBIT margins reflects a confluence of factors including unfavourable mix and increased competitive pressures.

Product Support Revenues

Product support revenues had muted growth in recent quarters, and the previously targeted CAGR of 7% through 2025 was increasingly out of reach.

Finning International Business Overview & Revenue Model

Company Description

Finning International Inc. is a leading distributor of Caterpillar equipment, delivering a comprehensive range of services and solutions across various sectors including construction, mining, forestry, and energy. Headquartered in Vancouver, Canada, Finning operates primarily in Canada, South America, and the United Kingdom, providing new and used equipment sales, equipment rental, and product support services to its diverse clientele.

How the Company Makes Money

Finning International generates revenue through several key streams. The primary source is the sale of new and used Caterpillar equipment, which includes heavy machinery, power systems, and engines used in industries such as construction and mining. Additionally, Finning derives significant income from its product support services, which encompass equipment maintenance, repairs, and the sale of parts. Another important revenue stream comes from equipment rentals, allowing customers flexible access to machinery without the need for ownership. Finning's strategic partnerships with Caterpillar and strong regional presence in its operating territories further bolster its financial performance by enhancing customer reach and service capabilities.

Finning International Financial Statement Overview

Summary

Finning International demonstrates solid financial performance with strong revenue growth and efficient cost management, as evident from its healthy margins and increasing free cash flow. The balance sheet reflects stable leverage and asset management, though there is a slight dip in ROE. Overall, the company shows a positive financial trajectory with effective cash flow management and growth potential in the industrial distribution sector.

Income Statement

Finning International has shown strong revenue growth of 23.3% from 2021 to 2022 and 13.5% from 2022 to 2023, with a TTM revenue growth rate of 2.1%. Gross profit margin remains robust at 22.1% for TTM, indicating efficient cost management. However, the net profit margin has slightly decreased to 4.3% TTM from 4.5% in the previous year. EBITDA margin is healthy at 10.2% TTM, indicating strong operational performance.

Balance Sheet

The company maintains a reasonable debt-to-equity ratio of 0.98, reflecting a balanced approach to leveraging. The equity ratio is stable at 33.0% TTM, indicating solid asset backing. Return on equity is slightly reduced to 18.4% TTM compared to the previous year, suggesting a minor decline in profitability relative to equity.

Cash Flow

Free cash flow has shown significant growth of 39.3% from 2023 to TTM, highlighting effective cash generation. The operating cash flow to net income ratio is strong at 2.72 TTM, indicating efficient conversion of income to cash. The free cash flow to net income ratio is also robust at 2.43 TTM.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.44B	11.21B	10.53B	9.28B	7.29B	6.20B
Gross Profit	2.52B	2.48B	2.58B	2.22B	1.80B	1.57B
EBITDA	1.17B	1.21B	1.28B	1.09B	869.00M	698.00M
Net Income	492.00M	509.00M	523.00M	503.00M	364.00M	232.00M
Balance Sheet
Total Assets	7.56B	7.73B	7.56B	7.27B	5.97B	5.46B
Cash, Cash Equivalents and Short-Term Investments	177.00M	384.00M	177.00M	354.00M	502.00M	539.00M
Total Debt	2.70B	2.58B	2.70B	2.33B	1.81B	1.70B
Total Liabilities	5.03B	5.09B	5.03B	4.81B	3.63B	3.25B
Stockholders Equity	2.51B	2.63B	2.51B	2.44B	2.32B	2.21B
Cash Flow
Free Cash Flow	1.20B	858.00M	8.00M	-170.00M	292.00M	847.00M
Operating Cash Flow	1.34B	1.01B	228.00M	1.00M	425.00M	962.00M
Investing Cash Flow	-136.00M	-128.00M	-229.00M	-268.00M	-151.00M	-99.00M
Financing Cash Flow	-1.08B	-818.00M	-71.00M	-13.00M	-300.00M	-573.00M

Finning International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 58.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

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 58.27 is above the 20-day moving average (MA) of 54.95, above the 50-day MA of 48.82, and above the 200-day MA of 41.87, indicating a bullish trend. The MACD of 2.46 indicates Positive momentum. The RSI at 82.19 is Negative, neither overbought nor oversold. The STOCH value of 89.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FTT.

Finning International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTT	79 Outperform	C$7.79B	16.35	18.79%	2.08%	6.61%	1.87%
TIH	76 Outperform	C$10.10B	20.49	17.36%	1.67%	10.93%	-3.34%
WJX	73 Outperform	C$502.18M	12.25	8.09%	6.03%	-2.65%	-47.65%
ADEN	70 Neutral	$739.35M	13.05	6.81%	2.01%	3.01%	2.15%
BBD.A	67 Neutral	C$11.87B	37.38	-23.10%	―	16.31%	4.12%
Sector *	61 Neutral	C$6.52B	9.25	3.44%	2.88%	6.99%	-11.09%
ARE	55 Neutral	C$1.29B	―	-9.26%	3.70%	1.70%	-154.73%

Finning International Corporate Events

Finning International Completes Strategic Divestitures of 4Refuel and ComTech

Finning International Inc. has completed the sale of its mobile on-site refueling business, 4Refuel, to H.I.G. Capital affiliates, and the sale of Compression Technology Corporation (ComTech) to a third party. These transactions are part of Finning’s strategy to simplify its business and concentrate on core dealership operations, aiming to unlock invested capital and enhance return on invested capital.

The most recent analyst rating on (TSE:FTT) stock is a Buy with a C$49.00 price target. To see the full list of analyst forecasts on Finning International stock, see the TSE:FTT Stock Forecast page.

Finning International Appoints New CFO Amid Strategic Transition

Finning International has appointed David Primrose as Executive Vice President and Chief Financial Officer, following the departure of Greg Palaschuk, who will remain in an advisory role until July 31, 2025. This leadership change is part of Finning’s succession planning and aims to continue driving the company’s strategic execution and financial results, leveraging Mr. Primrose’s extensive experience within the organization.

The most recent analyst rating on (TSE:FTT) stock is a Buy with a C$49.00 price target. To see the full list of analyst forecasts on Finning International stock, see the TSE:FTT Stock Forecast page.

Finning International Announces Shareholder Meeting Results

Finning International Inc. announced the results of its Annual Meeting of Shareholders, where 72.07% of the company’s outstanding shares were represented. Shareholders approved all business items, including the appointment of auditors, executive compensation, and the election of directors, indicating strong support for the company’s current management and strategic direction.

The most recent analyst rating on (TSE:FTT) stock is a Buy with a C$49.00 price target. To see the full list of analyst forecasts on Finning International stock, see the TSE:FTT Stock Forecast page.

Finning International Sells 4Refuel to H.I.G. Capital for $450 Million

Finning International Inc. has announced the sale of its mobile on-site refueling business, 4Refuel, to H.I.G. Capital for up to $400 million, with an implied transaction value of approximately $450 million. This strategic move allows Finning to simplify operations and focus on core dealership operations, aiming to enhance earnings and sustainable growth. The transaction is expected to close in the third quarter of 2025, with proceeds used for share repurchases and reinvestment, potentially increasing earnings per share.