Reece Ltd
REH: XASX (AUS)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$17.30 | Lns | Npqf |
Reece Earnings: Improved Sales and Margins Despite Subdued Environment, but Softer Demand Expected
No-moat Reece’s half-year results were slightly ahead of our forecasts, with underlying EBITDA of AUD 526 million and underlying net profit after tax of AUD 224 million, growing at 8% and 6%, respectively, compared with the prior corresponding period thanks to improved operating margins. However, we forecast a weaker second half, with management expecting demand to soften across Australia and New Zealand, and the United States and margins to face pressure from higher wages.