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This video was created on 21 November 2025 for IG audiences by ausbiz.
ASX code: REH
Reece shares rise despite weak earnings outlook
Reece held its annual general meeting (AGM) today, warning of soft trading in the United States (US), Australia and New Zealand (NZ).
Adjusted earnings fell 18% year-on-year (YoY) due to higher depreciation and amortisation costs from recent investments. Like-for-like sales rose 2%, but overall performance remains subdued. Shares gained 2.5%, though Reece is still among the worst performers on the ASX 200 this year.
Temporary setback or a deeper issue?
Analysts criticised Reece’s costly US expansion, a move that weakened its Australian advantage. Concerns include heavy borrowing for acquisitions and share buybacks at higher prices.
Investment outlook
Reece once traded at 50 times earnings, now down to 21 times. Analysts expect further downside, suggesting 15 times earnings as fair value unless US operations recover. Without strong growth, expected earnings per share (EPS) of 7% – 8% imply only market-level returns.