Reece Ltd (REH) fair value: what the stock is really worth
As of Nov 6, 2026: fair value (intrinsic value) of Reece Ltd stock A$10.52, price A$18.38, that is 42.8% below the price, quality 67 out of 100. Rating: strongly overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
Our calculation puts a fair price 43% below what the stock costs today.
Quality 67/100
Low debt
Generates free cash flow
1.0% dividend yield · Well covered
Upbeat coverage
Broad data
Profit last quarter +25% vs. a year ago.
Mixed Growth(revenue 5y +8.4 %/yr in AUD)
Thin margins · 3.3% net margin (TTM)
Fair value A$10.52 · Strongly overvalued (−42.8%)
Trails peers(1/14)
Narrow moat38/100 · thin data
Risks from the AI analysis
🚩Lapse of over 15,000 retention and service rights due to unmet conditions🚩US rivals STAline and Ferguson pressure margins🚩Renewed ANZ competition from new owners
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 8, 2026.
How to read this chart
60‑month range A$9.96 – A$28.26 · fair‑value band A$7.89 – A$13.15 · the A$18.38 price screens above the A$10.52 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 8, 2026.
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Reece Limited engages in the distribution of plumbing, waterworks, heating, ventilation, air-conditioning, and refrigeration products to commercial and residential customers in Australia, New Zealand, and the United States. The company also offers irrigation and pools, and fire products.
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Its products include tapware and accessories; vanities and mirrors; showers; toilets; basins; baths and spas; pipe and fittings; sinks and troughs; hot water systems; bathroom and kitchen appliances; heating and cooling; irrigation and pools; pumps and water filtration systems; tools; and valves.
The company serves customers in the trade, retail, commercial, and infrastructure markets. The company was formerly known as Reece Australia Limited and changed its name to Reece Limited in November 2015. Reece Limited was founded in 1919 and is based in Cremorne, Australia.
Stock analysis
Reece Ltd (REH) currently trades at A$18.38, while our model-based Fair Value estimate is A$10.52, 43% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the Growth DCF group reads highest at a median of A$15.70 per share, and 3 of the 26 models we run sit above the A$18.38 price.
Bear case: the Asset-Based group reads lowest at A$2.05, and 23 of the 26 models stay below the price. Data coverage for this calculation is high.
Scenario range: A$7.89 (bear) to A$13.15 (bull), the price of A$18.38 sits above it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 67/100 (solid quality), in the Industrials sector.
Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.
Reece Ltd reported revenue of A$9.4B in FY2026 versus A$7.7B in FY2022, a compound +5.2%/yr. Reported net income was A$308M in FY2026, compounding −5.9%/yr from FY2022.
Key figures
Market cap A$11.3B (≈ $7.8B) Mid · P/E ratio 37.5 · P/S ratio 1.21 · EPS (TTM) A$0.4900 · Dividend yield 1.0% · Net margin 3.3% · Return on equity 7.9% · Return on assets (EBIT) 7.4% (5-year average).
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 38 out of 100 (low confidence).
What moves the price
The share trades about 3% below its 52-week high and 75% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Industrials peers we cover trades at −28% fair-value upside, at −43%, REH screens richer than that median.
Fair Value models
BearA$7.89Fair Value A$10.52BullA$13.15
Price A$18.38 · Downside -42.8%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2026 figures (about 4 months old). Earnings retained since then (A$0.1084 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.64/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
+4.5%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+2.0%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+8.4%
Start year 2021 (pandemic). Over 10 years: +15.2% a year
Revenue growth 37 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+11.1%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+3.5%
Earnings growth per share plus dividend.
Earnings per share, growth per year+2.5%
Dividend (yield on the price)1.0%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.2.5% vs 2.8%, steady
Profit margin 2021 to 2026 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.8% → 6%
Pace: the 5-year rate starts in 2021 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+13.3%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+5.3%
Yearly sales growth analysts expect, extended to five years.
After inflation (Australia: IMF forecast 3.0% a year to 2030, 2.9% from 2016 to 2025) that is about +10.1% a year for the price and +2.3% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (71 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Hype
Recent news coverage is unusually upbeat, far more positive than stocks are typically covered.
AI conclusion: Reece shows capability in US branch expansion and ANZ volume recovery, yet its core weakness is thin evidence of durable advantage combined with execution issues in commodity distribution facing price pressure.
Main risk: Direct competition from STAline Waterworks, founded by former Fortiline executives, and larger incumbent Ferguson could erode Reece's US market share and compress margins in waterworks and plumbing distribution.
Bull case: Reece could leverage its branch density, supplier relationships and digital tools such as the maX app to retain customers and improve efficiency, allowing the maturing US network to deliver higher returns over time.
Bear case: Persistent competition in the US from STAline and Ferguson combined with ANZ pressure could lead to sustained margin compression, slower branch payback and reduced ability to fund further network growth.
Reece continues to expand its US branch network while ANZ volumes recover, yet the recent lapse of over 15,000 retention and service rights due to unmet conditions points to execution hurdles in a weaker housing market. Our models see the stock as overvalued amid these mixed regional dynamics. Will digital tools and productivity gains ultimately outweigh persistent margin pressure from the American operations?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Industrial Distribution · 107 stocks
Beats the industry median on 1/14 measures
Overall it trails its industry peers.
Valuation
Quality Score67 · Top 25%
Fair Value upside−42.8% · Bottom 25%
Profitability
Return on equity (12 months)7.9% · Below median
Return on assets4.0% · Below median
Net margin (12 months)3.3% · Below median
Operating margin (12 months)5.6% · Below median
Growth and dividend
Revenue growth (quarter YoY)3.4% · Below median
Dividend yield (12 months)1.0% · Bottom 25%
Balance sheet
Debt / equity0.28× · Above median
Valuation Multiplesvs Industrial Distribution median · lower = cheaper
P/E (12 months)37.5× · Priciest 25%
P/B3.02× · Pricier than median
P/S (12 months)1.21× · Pricier than median
Price / free cash flow (fiscal year)23.4× · Pricier than median
EV/EBITDA17.2× · Priciest 25%
Strength profile in five axes (Snowflake)
This stockSector peers
VALUE (fair-value potential)0· sector 45
FUTURE (revenue growth)17· sector 40
PAST (return on equity)32· sector 38
HEALTH (low debt)86· sector 93
DIVIDEND (yield)20· sector 38
VALUE 0: the price sits above our fair-value range.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Reece Ltd Fair Value". https://www.fairvalue-calculator.com/stock/REH
Frequently asked questions
Is Reece Ltd (REH) overvalued or undervalued?
As of Nov 8, 2026, our model estimates a fair value of A$10.52 versus a price of A$18.38, about 43% lower (overvalued).
What is the fair value of REH?
Our model-based fair value for Reece Ltd is A$10.52 (as of Nov 8, 2026), built from audited fundamentals. The current price: A$18.38.
What is the quality score of REH?
Reece Ltd has a Quality Score of 67/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Reece Ltd (REH)?
Our model-based price target is the fair value of A$10.52 (as of Nov 8, 2026) from 26 valuation models. Cautious scenario A$7.89, optimistic scenario A$13.15. It is a calculation from audited fundamentals, not an analyst target.
What is the Reece Ltd stock forecast for 2026?
Our models put fair value at A$10.52, about 43% lower versus a price of A$18.38 (overvalued). Cautious scenario A$7.89, optimistic scenario A$13.15. The calculation is refreshed regularly with new filings.
What is the revenue of Reece Ltd (REH)?
Reece Ltd reported trailing-twelve-month revenue of about A$9.4B (latest available figure, as of Nov 8, 2026).
Does Reece Ltd pay a dividend?
Reece Ltd currently shows a dividend yield of 1.02% relative to its recent price (as of Nov 8, 2026).
How much is the dividend of Reece Ltd (REH) and when is the ex-dividend date?
Reece Ltd pays a dividend of A$0.188 per share a year, a dividend yield of 1.0%. The last ex-dividend date was Oct 6, 2026. A dividend has been paid every year since at least 1988. The payout ratio is 38.4% of earnings. Free cash flow covers the dividend 4.17 times. Our assessment: Well covered. A low payout and the dividend is fully funded by free cash flow, a comfortable, sustainable dividend.
What growth is priced into Reece Ltd (REH)?
For today's price to be fair in a discounted-cash-flow model, Reece Ltd would have to grow free cash flow by +13.3 % per year for five years (discount rate 9.6 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +8.4 % per year. As of Nov 8, 2026.
What discount rate (WACC) does the fair value of REH use?
Our models discount Reece Ltd at 9.6 %: a base by market capitalisation (mid), damped by beta 1.04, country premium for Australia. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Reece Ltd that is +13.3 % per year for five years, then slowing evenly to 2 % by year ten, using the same discount rate (9.6 %) and the same formula as our fair value.
How much growth has Reece Ltd (REH) delivered so far?
Over the past 5 years revenue at Reece Ltd grew +8.4 % a year. The price currently implies free-cash-flow growth of +13.3 % per year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Reece Ltd (REH) growing?
The median revenue growth in the sector is +7.8 % a year. That is the yardstick for the growth priced into Reece Ltd (+13.3 % per year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Reece Ltd (REH)?
The free-cash-flow yield on the price is 4.27 %: that much free cash flow Reece Ltd produces per unit of market value. When it exceeds the discount rate of our models (9.6 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Reece Ltd (REH)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Reece Ltd it is A$10.52 per share (as of Nov 8, 2026), against a price of A$18.38. It is the blended result of 26 valuation models in 8 families (DCF Models, Earnings-Based, Dividend Discount, Multiples, Asset-Based, Growth DCF, Economic Profit, Growth Earnings).
Is Reece Ltd stock overvalued or undervalued in 2026?
As of Nov 8, 2026, REH trades above its calculated fair value: price A$18.38, fair value A$10.52, a gap of about −43% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of REH?
No. The price is what the market pays today (A$18.38); the fair value is what the company's own numbers justify (A$10.52). For Reece Ltd the two are A$7.86 per share apart. That gap is exactly why we show both numbers side by side.
How much is Reece Ltd worth?
The market values Reece Ltd at about A$11.3B (market capitalisation, as of Nov 8, 2026). Per share that is A$18.38; our models calculate a fair value of A$10.52 per share.
What do the bullish and bearish scenarios say about REH?
Our models span a range for Reece Ltd: cautious scenario A$7.89, base A$10.52, optimistic A$13.15 per share (as of Nov 8, 2026, price A$18.38). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of REH?
Reece Ltd trades at a price-to-earnings ratio of 37.5 (as of Nov 8, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of A$10.52 is built from several models across several years. Median P/E at fiscal year-end, 9 fiscal years (2018 to 2026), reported earnings: 29.2. Other multiples: P/B 3.0, P/S 1.2, EV/EBITDA 17.2.
How solid is the balance sheet of Reece Ltd (REH)?
Balance-sheet figures for Reece Ltd (as of Nov 8, 2026): return on equity 7.9%, debt of 0.28 per unit of equity. They feed the Quality Score of 67/100, which measures business quality independently of the share price.
How far is REH from its 52-week high?
Reece Ltd trades at A$18.38, about 3% below its 52-week high of A$18.97 and 75% above the low of A$10.50 (as of Nov 6, 2026). Distance from the high says nothing about value: that is what the fair value of A$10.52 is for.
Which stocks are comparable to Reece Ltd?
From the same area (Industrials) we also value W.W. Grainger, Inc, Fastenal Company, Ferguson Enterprises Inc, WESCO International, Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Reece Ltd stock attractive at the current price?
The data as of Nov 8, 2026: price A$18.38, calculated fair value A$10.52 (−43%), Quality Score 67/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of REH calculated?
We run Reece Ltd through 26 models from 8 families: DCF Models, Earnings-Based, Dividend Discount, Multiples, Asset-Based, Growth DCF, Economic Profit, Growth Earnings. Every model gets the same audited fundamentals; the fair value of A$10.52 builds on their evidence-weighted average, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 13.0% above its aggregate fair value. Reece Ltd itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Reece Ltd (REH)?
The closing price on Nov 6, 2026 was A$18.38. Our model-based fair value is A$10.52, about 43% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Reece Ltd right now?
The price sits above even our optimistic bull case (A$13.15). The favourable scenario is already priced in. Solid but not exceptional quality (67/100) and above fair value, neither a clear bargain nor a standout compounder.
Where does the earnings growth of Reece Ltd (REH) come from?
Earnings per share at Reece Ltd grew +4.2 % a year from 2015 to 2026. Broken into its drivers: revenue per share +13.8 %, EBIT margin −9.3 %, tax rate +0.4 %, residual (interest, one-offs) +0.6 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Reece Ltd
How large is the market capitalisation of Reece Ltd (REH)?
The market capitalisation of Reece Ltd is A$11.3B (≈ $7.8B). The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Reece Ltd (REH)?
The price-to-sales ratio of Reece Ltd is 1.21 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Reece Ltd (REH)?
Earnings per share at Reece Ltd are A$0.4900 (price ÷ EPS = P/E 37.5). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Reece Ltd (REH)?
The dividend yield of Reece Ltd is 1.0% (payout 38.4%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Reece Ltd (REH)?
The net margin of Reece Ltd is 3.3% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Reece Ltd (REH)?
The return on equity (ROE) of Reece Ltd is 7.9% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Reece Ltd (REH)?
On an EBIT basis the return on assets of Reece Ltd is 7.4% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Reece Ltd (REH)?
The operating margin of Reece Ltd is 5.6% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Reece Ltd (REH)?
Revenue at Reece Ltd is growing +3.4% versus a year earlier (3y avg +2.0%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Reece Ltd (REH)?
Earnings per share at Reece Ltd are growing +25.2% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Reece Ltd (REH) carry?
The net debt of Reece Ltd is A$1.9B (fiscal year 2026, ≈ 4.0 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 8, 2026