In key news on Australian stocks, shares of Reece Limited (AU:REH) surged to a record high following the release of its half-yearly results for FY24. The company’s adjusted EBITDA surged by 7.7% to AU$526 million in the first half, supported by strict operational cost controls. Investors cheered the numbers, with shares currently trading at a gain of over 19%.
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With a history spanning over 100 years, Reece has evolved into a leading global provider of plumbing, waterworks, and HVAC-R (heating, ventilation, air conditioning, and refrigeration) products.
Insights from Reece’s First Half Results
Reece’s sales revenue increased 2.5% to AU$4.54 billion. Sales revenue increased by 2% to AU$1.97 billion for the ANZ (Australia and New Zealand) region. In comparison, the U.S. region reported flat sales revenue (in U.S. dollars) due to a soft trading environment.
Additionally, group costs rose by 5% during the period, primarily due to higher employee expenses and an uptick in depreciation and amortization. The company’s statutory net profit after tax grew by 20% to AU$224 million.
The company declared an interim dividend of AU$0.08 per share, similar to the previous year’s payment during the same period.
Speaking of outlook, Reece expects moderate demand in the second half across its business, especially in ANZ.
What is the Forecast for Reece Stock?
According to TipRanks’ consensus, REH stock has received a Moderate Sell rating based on one Sell recommendation. Post-results, UBS analyst Lee Power reiterated his Sell rating on the stock, predicting a downside of 40.5%. UBS highlighted Reece’s powerful cost control and noted that the top line was largely in line with expectations.
The Reece share price forecast is AU$15.40, which is 46.3% below the current trading levels.
