REH:ASXReece Limited Analysis
Data as of 2026-03-15 - not real-time
A$14.52
Latest Price
6/10Risk
Risk Level: Medium
Executive Summary
Reece Limited (REH) is trading at AUD 14.52, well above its DCF‑derived fair value of roughly AUD 6.2 and carries a trailing P/E of 33 versus an industry average of 29, suggesting the stock is currently overvalued. Technically the 20‑day SMA (15.08) sits above the 50‑day (14.57) and 200‑day (13.24) averages, indicating a bullish trend, yet the MACD histogram is negative and the signal line is bearish, while volume is on a downtrend and 30‑day volatility is high at over 53%. Recent earnings material show flat like‑for‑like sales and a 6% decline in EBITDA, reinforcing earnings pressure.
Fundamentally, the company posts modest revenue growth (5.6%), thin profit margins (3% net), a high debt‑to‑equity ratio (~64%) and a dividend yield of 1.19% with a 41% payout, which appears sustainable but offers limited upside.
Fundamentally, the company posts modest revenue growth (5.6%), thin profit margins (3% net), a high debt‑to‑equity ratio (~64%) and a dividend yield of 1.19% with a 41% payout, which appears sustainable but offers limited upside.
Market Outlook
Short Term
< 1 yearNeutral
Model confidence: 5/10
Key Factors
- Bearish MACD and decreasing volume
- Current price above fair value
- Weak H1 earnings and flat like‑for‑like sales
Medium Term
1–3 yearsNeutral
Model confidence: 4/10
Key Factors
- Modest revenue growth amid a cyclical housing market
- High debt load limiting financial flexibility
- Potential for dividend stability if cash flow remains healthy
Long Term
> 3 yearsNeutral
Model confidence: 6/10
Key Factors
- Low beta indicating defensive characteristics
- Sustainable dividend payout ratio
- Opportunity for valuation re‑rating if earnings recover
Key Metrics & Analysis
Financial Health
Revenue Growth5.60%
Profit Margin3.04%
P/E Ratio33.0
ROE7.22%
ROA4.34%
Debt/Equity64.17
P/B Ratio2.4
Op. Cash FlowA$542.8M
Free Cash FlowA$345.4M
Industry P/E29.1
Technical Analysis
TrendBullish
RSI45.0
SupportA$13.30
ResistanceA$16.87
MA 20A$15.08
MA 50A$14.57
MA 200A$13.24
MACDBearish
VolumeDecreasing
Fear & Greed Index72.88
Valuation
Fair ValueA$6.19
Target PriceA$15.61
Upside/Downside7.49%
GradeOvervalued
TypeValue
Dividend Yield1.19%
Risk Assessment
Beta0.59
Volatility53.62%
Sector RiskMedium
Reg. RiskLow
Geo RiskMedium
Currency RiskMedium
Liquidity RiskMedium
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This analysis may contain inaccuracies and is provided for informational and research purposes only. It is not personal investment advice, a recommendation, or an instruction to buy, sell, or hold any asset.