Morningstar Lowers Reece Fair Value to A$10.30

Morningstar Reduces Reece Fair Value Estimate

Morningstar lowered its fair‑value estimate for Reece Ltd (ASX:REH) by 2%, setting the new target at A$10.30. The adjustment reflects the research firm’s assumptions regarding the weighted average cost of capital and the time value of money.

Reece, a distributor of construction supplies operating in Australia and New Zealand, continues to enjoy high margins in these markets because of limited competition. However, Morningstar does not anticipate any substantial growth beyond the current cyclical recovery, noting that the company now faces more focused competitors.

The analyst firm also concluded that Reece’s shares are overvalued and expects the improvement in EBITDA margins to be lower than what the broader market currently expects.

According to data compiled by LSEG, fourteen analysts rate the stock as a "hold" on average, with a median price target of A$15.45. In the most recent trading session, Reece shares closed at A$16.80, representing a year‑to‑date gain of 24.9%.