Canada's Toromont Q2 revenue beats estimates on Equipment Group growth

Overview

• Canada industrial equipment dealer's Q2 revenue rose 16%, beating analyst expectations

• Q2 net earnings and EPS were flat, reflecting higher purchase commitment expenses

• During qtr, company increased AVL stake to 80%, incurring C$54.3 mln in related expenses

Outlook

• Toromont did not provide specific financial guidance for the current qtr or full yr in the press release

Result Drivers

• EQUIPMENT GROUP GROWTH - Revenue rose 18% in Equipment Group, led by higher new equipment sales, rentals, and product support, with strong contribution from AVL acquisition

• GROSS MARGIN IMPROVEMENT - Gross profit margin increased 230 bps to 26.9% in Q2, mainly due to higher equipment and rental margins in Equipment Group

• PURCHASE COMMITMENT EXPENSES - Net earnings and EPS were flat due to C$54.3 mln in purchase commitment expenses related to increasing AVL stake

Company press release: ID:nCNWqH4wja

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the heavy machinery vehicles peer group is "buy"

• Wall Street's median 12-month price target for Toromont Industries Ltd is C$242.00, about 14.9% above its July 27 closing price of C$210.63

• The stock recently traded at 26 times the next 12-month earnings vs. a P/E of 27 three months ago

Reuters Recommended Reads

• July 28 - PACCAR Q2 revenue and EPS beat expectations on strong truck orders

• July 28 - Oshkosh Q2 profit beats on improved pricing

• July 28 - Herc Holdings beats Q2 revenue estimates, lifts 2026 outlook

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)