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Weir Group (WEGRY)
OTHER OTC:WEGRY
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Weir Group
(OTC:WEGRY)
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Rating:65Neutral
Price Target:
$21.50
▲(8.42% Upside)
Action:DowngradedDate:03/08/26
The score is primarily supported by improving operating performance and constructive 2026 guidance (growth, margin expansion, and deleveraging plans). This is tempered by balance-sheet risk from higher leverage and weaker recent cash flow momentum, while technical indicators point to a weak near-term trend despite oversold signals; valuation is moderately supportive.
Positive Factors
Cash Generation
Sustained high cash conversion signals durable operational cash flow and tight working capital control. Over the medium term this funds capex, dividends and M&A integration, enables rapid deleveraging and provides flexibility to withstand mining-cycle volatility without external financing.
Margin Improvement
Material margin expansion to ~20% reflects lasting operational gains from the Performance Excellence programme and accretive M&A. Higher sustainable margins increase free cash flow per unit revenue, strengthening returns and providing headroom to invest in product development and aftermarket capabilities.
Aftermarket & Order Strength
Aftermarket-led growth and an improving order book drive recurring revenue and predictability. A larger aftermarket mix raises lifetime customer value, smooths cyclical OEM volatility and supports stable margins and cashflows across 2-6 months and beyond.
Negative Factors
Increased Leverage
Leverage rising to ~2x post-acquisition reduces financial flexibility and increases refinancing risk if commodity or OEM cycles deteriorate. Though management plans deleveraging, elevated debt constrains strategic optionality and raises interest and covenant sensitivity over the medium term.
OEM Revenue Volatility
Phasing-driven declines in original equipment sales highlight cyclicality and potential softness in new equipment demand. Reliance on aftermarket to offset OE weakness may limit top-line expansion if OEM orders don't recover, introducing structural growth risk over several quarters.
Currency Exposure
Material FX translation headwinds demonstrate ongoing currency sensitivity across global operations. Persistent or volatile FX movements can erode reported profits and cash flow, complicating planning and reducing earnings visibility unless hedging and natural offsets are materially strengthened.
Weir Group (WEGRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.99B
Dividend Yield1.28%
Average Volume (3M)21.57K
Price to Earnings (P/E)31.2
Beta (1Y)1.02
Revenue Growth0.75%
EPS Growth44.30%
CountryUS
Employees11,444
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.35
Shares Outstanding519,224,100
10 Day Avg. Volume1,141
30 Day Avg. Volume21,570
Financial Highlights & Ratios
PEG Ratio-1.36
Price to Book (P/B)3.96
Price to Sales (P/S)3.00
P/FCF Ratio29.23
Enterprise Value/Market Cap0.88
Enterprise Value/Revenue3.44
Enterprise Value/Gross Profit8.51
Enterprise Value/Ebitda16.14
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Weir Group Business Overview & Revenue Model
Company DescriptionThe Weir Group PLC produces and sells highly engineered original equipment worldwide. It operates in two segments, Minerals and ESCO. The Minerals segment offers slurry handling equipment and associated aftermarket support services for abrasive high-wear applications used in the mining and oil sands markets. The ESCO segment provides ground engaging tools for mining machines. This segment also produces smart and rugged cameras that monitor and provide valuable and timely data on equipment performance, faults, payloads, and rock fragmentation. The company offers its products under the Accumin, Aspir, Cavex, Delta Industrial, Enduron, Envirotech, Floway, GEHO, Gemex, Hazleton, Hydrau-Flo, R. Wales, Isodry, Isogate, Lewis, Linatex, Multiflo, Synertrex, Stampede, Trio, Vulco, FusionCast, ESCO, Motion Metrics, and Warman brands. The company was founded in 1871 and is headquartered in Glasgow, the United Kingdom.
How the Company Makes MoneyWeir Group generates revenue primarily through the sale of its equipment and services across its core sectors. The Minerals segment contributes significantly to the company's earnings, driven by the demand for mining equipment and aftermarket services. The Oil & Gas segment provides revenue through the supply of specialized products and services to the energy sector, particularly in drilling and production operations. The Power & Industrial segment adds to the revenue stream through the provision of equipment and services for energy generation and industrial applications. Additionally, Weir Group benefits from long-term contracts and partnerships with major players in the mining and energy industries, which provide a stable revenue base. The company also focuses on aftermarket services, which include maintenance, repair, and replacement parts, creating a recurring revenue stream that enhances profitability.
Weir Group Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveys a broadly positive operational and financial story: mid-single-digit revenue growth, strong aftermarket performance, 15% operating profit growth, margin expansion to 20.2%, robust cash conversion (92%), meaningful emissions reduction (−31% vs 2019), and strategic M&A that expands software and geographic reach. Near-term weaknesses are largely transitional or one‑off: higher net debt from acquisitions (net debt/EBITDA 1.9x), elevated working capital (22.4% of sales) driven by inventory and tariffs, legacy asbestos exposure ( U.S. entity in Chapter 11), and a slip in total incident rate on safety. Management has clear plans to delever, normalize working capital, complete integration of acquisitions, and continue Performance Excellence while investing in R&D and systems. Overall, highlights outweigh the lowlights and the company appears well positioned for continued growth while managing short-term execution and legacy risks.Q4-2025 Updates
Positive Updates
Revenue and Orders Growth
Revenue grew 6% (constant currency) to GBP 2.6bn; total orders increased 7% to GBP 2.6bn, driven by strong aftermarket demand and contributions from acquisitions.
Aftermarket Strength
Aftermarket orders grew 8% and aftermarket revenue grew 8%, supported by high mining activity and increased demand for wear parts and expendables.
Operating Profit and Margin Expansion
Operating profit rose 15% year‑on‑year to GBP 518m. Operating margin expanded by 150 basis points to 20.2%, achieving the 20% margin target a year early.
Cash Conversion and Dividend
Free operating cash conversion was 92%, within the 90%–100% target range. Full year dividend increased 4% to 41.7p per share.
Emissions and Sustainability Progress
Absolute Scope 1 and 2 emissions fell 31% versus the 2019 baseline, exceeding the original 2030 SBTi target of a 30% reduction.
Divisional Performance — Minerals
Minerals orders grew 5%; excluding large projects orders up 7%. Division revenue increased 6% and operating profit rose 11% to GBP 406m; operating margin reached 21.9% (up 100bps).
Divisional Performance — ESCO and Software
ESCO orders grew 11% (like‑for‑like 4% excluding Micromine). ESCO operating profit increased 22% to GBP 152m and margin expanded 260bps to 21.4%. Micromine shows 94% customer retention, recurring revenue ~88% and annualized recurring revenue up 24%.
Performance Excellence and Efficiency Gains
Cumulative Performance Excellence savings reached GBP 59m in‑year and the final savings target was increased to GBP 90m; program delivered under budget with total program costs GBP 113m.
Strategic M&A and Product Expansion
Completed self‑funded acquisitions (Micromine, Townley, Fast2Mine) and strategic investments/partnerships (CiDRA, ESCO Chile JV). New product launches (ENDURON VSM, crushers, mill pumps) and first VSM order received.
Capital Structure and Deleveraging Plan
Net debt/EBITDA rose to 1.9x due to acquisitions but remained within target; company expects to return to 0.5–1.5x by end of 2026 supported by continued strong cash conversion.
Negative Updates
Higher Net Debt Post‑Acquisitions
Net debt-to-EBITDA increased to 1.9x (toward the top end of target range) following significant acquisition activity in 2025, creating near-term deleveraging requirements.
Working Capital and Inventory Build
Working capital as a percentage of sales rose 170 basis points to 22.4%, driven by inventory buildup related to Performance Excellence activity and U.S. tariffs; expected to normalize toward ~20% in 2026.
Return on Capital Employed Decline
Return on capital employed fell by 140 basis points to 17.9%, reflecting acquisition-related capital and near-term dilution of returns.
Free Cash Flow and Liquidity Headwinds
Free cash flow declined to GBP 267m on higher tax payments, increased finance costs, and derivative settlement outflows; adjusted operating cash decreased GBP 25m to GBP 566m.
Adjusting Items and Exceptional Costs
Adjusting items totalled GBP 73m (including GBP 47m exceptional items). Acquisition/integration costs were GBP 22m and Performance Excellence costs contributed to total program spend of GBP 113m.
Asbestos‑Related U.S. Entity and Chapter 11
A U.S. entity holding asbestos claims entered Chapter 11 and was deconsolidated; management believes the remaining provision is sufficient but this remains a legacy risk.
Safety Performance Shortfall
Company missed its '0 harm' ambition as total incident rate increased year‑on‑year, though the number of recordable incidents improved in H2 and leadership is taking corrective actions.
Original Equipment (OE) Orders Flat
Original equipment orders were unchanged year‑on‑year (OE revenue up only 2%), with the phasing down of large greenfield projects limiting near‑term OE growth.
Translational FX and Tariff Headwinds
Translational FX created a GBP 22m headwind to profit and a 10bps margin headwind; U.S. tariffs impacted year‑end inventory balances and added complexity to operations.
Planned Near‑Term Investments Partly Offset Margins
Management expects to reinvest some Performance Excellence benefits into R&D and a global ERP (SAP S/4), creating an expected ~80bps drag on margins in 2026 even as they target 50bps margin expansion overall.
Company Guidance
Guidance for 2026 is for another year of revenue and operating profit growth with 50 basis points of operating margin expansion (management’s bridge implies a 20.7% operating margin driven by +110bps from Performance Excellence, +20bps from acquisitions and an ~80bps reinvestment headwind into R&D/IT), mid-single-digit aftermarket revenue growth and continued strong software growth; cash and balance-sheet targets include free operating cash conversion of 90–100%, net interest cost of ~GBP 90m, CapEx and lease spend around 1.3x depreciation, expected exceptional cash costs of ~GBP 25–30m, an effective tax rate of 28%, a return toward net debt/EBITDA of 0.5–1.5x by end‑2026 (from 1.9x post‑acquisitions), and working capital normalizing toward a ~20% of sales target while cumulative Performance Excellence savings are being increased to GBP 90m (GBP 59m delivered to date).Weir Group Financial Statement Overview
Summary
Operating profitability has improved materially (strong gross margin and higher EBIT margin), and free cash flow remains positive with solid earnings quality. Offsetting this, leverage increased notably in the latest year (higher debt and debt-to-equity), and cash flow momentum weakened with a sharp free cash flow decline and choppy revenue/net margin trends.Income Statement
Profitability and margins have improved meaningfully over time, with the latest annual period showing strong gross margin (~40%) and higher operating profitability (EBIT margin ~19%) versus prior years. Revenue growth is volatile (down in 2024, then sharply up in 2025), and net margin declined in the latest year (~9.6%) versus 2024 (~12.5%), indicating some pressure below the operating line despite better operating performance.77
Positive
Balance Sheet
The balance sheet shows moderate leverage overall, but risk increased in the latest year as total debt rose sharply and debt-to-equity moved up to ~0.94 (from ~0.59 in 2024). Equity has grown, and returns on equity remain solid (~12.7% latest year), but the step-up in leverage reduces financial flexibility versus the prior year.58
Neutral
Cash Flow
Cash generation remains positive with free cash flow exceeding $250M in the latest year and free cash flow running at ~81% of net income, which supports earnings quality. However, operating cash flow conversion weakened versus the prior year (operating cash flow down while earnings held up), and free cash flow growth turned sharply negative in the latest year, suggesting higher working capital or investment needs impacting near-term cash flow.60
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.51B | 2.51B | 2.64B | 2.47B | 1.93B |
| Gross Profit | 1.01B | 1.02B | 994.90M | 873.90M | 692.00M |
| EBITDA | 581.08M | 519.00M | 489.50M | 422.80M | 361.90M |
| Net Income | 241.49M | 312.20M | 227.90M | 213.40M | 258.50M |
Balance Sheet | |||||
| Total Assets | 4.53B | 3.79B | 3.89B | 4.06B | 3.50B |
| Cash, Cash Equivalents and Short-Term Investments | 508.11M | 556.40M | 707.20M | 691.20M | 564.40M |
| Total Debt | 1.78B | 1.09B | 1.40B | 1.49B | 1.34B |
| Total Liabilities | 2.62B | 1.93B | 2.19B | 2.32B | 2.04B |
| Stockholders Equity | 1.90B | 1.84B | 1.69B | 1.73B | 1.44B |
Cash Flow | |||||
| Free Cash Flow | 257.43M | 377.40M | 307.60M | 264.70M | 103.30M |
| Operating Cash Flow | 316.12M | 449.90M | 394.30M | 320.80M | 156.10M |
| Investing Cash Flow | -844.38M | -52.80M | -70.60M | -68.30M | 195.20M |
| Financing Cash Flow | 537.16M | -301.90M | -322.50M | -303.80M | -217.30M |
Weir Group Technical Analysis
Negative
19.83
Price Trends
21.74
Negative
20.35
Negative
18.84
Positive
Market Momentum
-0.91
Positive
30.37
Neutral
5.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEGRY, the sentiment is Negative. The current price of 19.83 is below the 20-day moving average (MA) of 21.62, below the 50-day MA of 21.74, and above the 200-day MA of 18.84, indicating a neutral trend. The MACD of -0.91 indicates Positive momentum. The RSI at 30.37 is Neutral, neither overbought nor oversold. The STOCH value of 5.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WEGRY.
Weir Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $10.10B | 30.59 | 13.29% | ― | 12.60% | 24.02% | |
67 Neutral | $9.73B | 31.85 | 25.19% | 1.28% | 2.37% | -6.93% | |
66 Neutral | $9.46B | 26.05 | 15.81% | 1.17% | 3.19% | 69.89% | |
65 Neutral | $9.99B | 31.16 | 13.42% | 1.28% | 0.75% | 44.30% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $11.75B | 50.02 | 6.19% | ― | 5.52% | 9.03% | |
59 Neutral | $6.57B | -28.04 | -8.50% | ― | 0.27% | -159.24% |
* Industrials Sector Average
WEGRY
Weir Group
19.45
4.12
26.86%
DCI
Donaldson Company
84.03
16.08
23.66%
FLS
Flowserve
74.33
23.79
47.07%
GNRC
Generac Holdings
200.27
66.60
49.82%
SPXC
SPX
202.46
64.65
46.91%
MIDD
The Middleby
139.28
-15.62
-10.08%
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.