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Finning International
(TSX:FTT)
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Rating:63Neutral
Price Target:
C$102.00
â–¼(-5.47% Downside)
Action:Reiterated
Date:08/10/26
The score is primarily driven by solid profitability and strong returns, but held back by weak and volatile cash-flow conversion. The earnings call adds support due to backlog strength, product support growth, and operational efficiency progress, while technical indicators point to soft near-term momentum. Valuation is moderate (P/E ~18.8 with a ~1.29% yield), providing limited lift.
Positive Factors
Recurring Product Support Growth
Parts, maintenance and lifecycle services create recurring demand from Finning’s installed equipment base. Continued product support growth and expanded technician capacity can improve revenue visibility and deepen customer relationships over multiple years.
Negative Factors
Volatile Cash-Flow Conversion
Positive cash flow is undermined by weak conversion and large historical swings. Working-capital needs and reinvestment can absorb earnings during growth periods, limiting financial flexibility and reducing confidence in consistent cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Product Support Growth
Parts, maintenance and lifecycle services create recurring demand from Finning’s installed equipment base. Continued product support growth and expanded technician capacity can improve revenue visibility and deepen customer relationships over multiple years.
Read all positive factors
Finning International (FTT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$12.43B
Dividend Yield1.31%
Average Volume (3M)448.79K
Price to Earnings (P/E)22.7
Beta (1Y)1.22
Revenue Growth0.31%
EPS Growth18.50%
CountryCA
Employees13,188
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)4.20
Shares Outstanding130,116,840
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$123.25Price Target Upside14.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)4.71
Revenue Forecast (FY)C$11.44B
Finning International Business Overview & Revenue Model
Company Description
Finning International Inc. sells, services, and rents heavy equipment, engines, and related products in Canada, Chile, the United Kingdom, Argentina, and internationally. The company offers articulated trucks, asphalt pavers, backhoe loaders, cold...
How the Company Makes Money
Finning makes money primarily by acting as an authorized Caterpillar dealer, earning revenue across multiple equipment lifecycle stages. Its key revenue streams include: (1) New equipment sales: revenue from selling new Caterpillar heavy equipment...
Finning International Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call highlighted strong top-line growth, record EPS, expanding installed base and meaningful progress on strategic initiatives (product support growth, rental momentum, power & energy backlog). Operational metrics (invested capital turns, ROIC, SG&A efficiency) and balance sheet health (positive free cash flow, net debt/EBITDA 1.6x) reinforce a constructive execution story. Key negatives include margin compression driven by mix and ramp costs, regional product support moderation in parts of South America and the U.K., tariff headwinds, and timing uncertainty around the larger data center/prime power opportunity. Overall the positives—broad-based revenue growth, record EPS, expanding backlog and durable operational improvements—outweigh the transitory and mix-related challenges.Positive Updates
Record Quarterly EPS
Reported record quarterly EPS of CAD 1.22, up 21% year-over-year (Q2 2026 vs Q2 2025).
Negative Updates
Margin Compression
Gross profit margin declined to 21.3%, down 240 basis points year-over-year; SG&A margin decreased 220 basis points (LTM) and EBIT margin was down 30 basis points year-over-year, driven by lower product support margins and a higher mix of new equipment sales.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly EPS
Reported record quarterly EPS of CAD 1.22, up 21% year-over-year (Q2 2026 vs Q2 2025).
Read all positive updates
Company Guidance
Management's guidance emphasized continued conversion of a growing installed base into product support while maintaining cost and capital discipline: product support is a core focus (LTM product support CAD 6.2B; product support +11% YoY, Canada +19%) and is expected to be broadly stable in the short‑/mid‑term (with moderation in Chile through 2028), while backlog remains a key tailwind at CAD 3.8B (up 26% YoY, up 22% since Dec‑2025; ~50% mining, ~33% power & energy), and order intake continues to outpace deliveries. They plan to scale capacity (technician headcount +20% YoY; hiring roughly one technician a day; customer value agreements with labor +70% this quarter) and pursue rental and power opportunities (rental revenue +19% QoQ-led by Canada; construction rental +60% in the quarter; UK&I power new equipment +38% YTD; Canada power new equipment +63% YTD and backlog >100% YoY) while targeting stronger operating leverage and efficiency: invested capital turns 2.35x, adjusted ROIC 19%, net debt/adjusted EBITDA 1.6x, SG&A (LTM) 14.5% (‑120 bps), with Q2 results (revenue CAD 3.1B, EBIT CAD 249M +16% YoY, EBIT margin 8%, gross margin 21.3% and EPS CAD 1.22 +21% YoY, free cash flow +CAD 15M) underpinning their confidence but noting timing of data‑center projects remains uncertain.Finning International Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
68
Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.16B | 10.59B | 11.21B | 10.53B | 9.28B | 7.29B |
| Gross Profit | 2.48B | 2.37B | 2.48B | 2.50B | 2.22B | 1.80B |
| EBITDA | 1.24B | 1.23B | 1.08B | 1.16B | 977.00M | 744.00M |
| Net Income | 550.00M | 506.00M | 509.00M | 523.00M | 503.00M | 364.00M |
Balance Sheet | ||||||
| Total Assets | 8.80B | 7.80B | 7.73B | 7.56B | 7.27B | 5.97B |
| Cash, Cash Equivalents and Short-Term Investments | 280.00M | 397.00M | 316.00M | 177.00M | 288.00M | 502.00M |
| Total Debt | 2.60B | 2.31B | 2.58B | 2.70B | 2.33B | 1.81B |
| Total Liabilities | 5.80B | 5.01B | 5.09B | 5.03B | 4.81B | 3.63B |
| Stockholders Equity | 3.00B | 2.79B | 2.63B | 2.51B | 2.44B | 2.32B |
Cash Flow | ||||||
| Free Cash Flow | 213.00M | 480.00M | 856.00M | 8.00M | -170.00M | 292.00M |
| Operating Cash Flow | 445.00M | 688.00M | 1.01B | 228.00M | 1.00M | 425.00M |
| Investing Cash Flow | -121.00M | 217.00M | -128.00M | -229.00M | -268.00M | -151.00M |
| Financing Cash Flow | -515.00M | -817.00M | -816.00M | -71.00M | -13.00M | -300.00M |
Finning International Technical Analysis
Negative
107.90
Price Trends
98.95
Negative
97.69
Negative
89.36
Positive
Market Momentum
-1.75
Positive
43.36
Neutral
18.74
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTT, the sentiment is Negative. The current price of 107.9 is above the 20-day moving average (MA) of 97.64, above the 50-day MA of 98.95, and above the 200-day MA of 89.36, indicating a neutral trend. The MACD of -1.75 indicates Positive momentum. The RSI at 43.36 is Neutral, neither overbought nor oversold. The STOCH value of 18.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | C$14.31B | 33.95 | 7.89% | 0.09% | 14.82% | -82.14% | |
74 Outperform | C$4.39B | 20.47 | 13.09% | 2.45% | 18.28% | 35.28% | |
70 Outperform | C$17.69B | 34.26 | 15.53% | 0.96% | 8.83% | 6.15% | |
64 Neutral | C$660.35M | 10.10 | 12.07% | 4.04% | -4.10% | 82.03% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$12.43B | 22.74 | 19.22% | 1.14% | 0.31% | 18.50% | |
60 Neutral | C$3.24B | -51.98 | -6.76% | 1.52% | 21.48% | -323.81% |
* Industrials Sector Average
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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.