Canada's Exco Technologies Q3 sales misses estimates

Overview

• Exco fiscal Q3 sales decline 4% yr/yr, missing analyst expectations, per LSEG data

• Net income for fiscal Q3 falls 34% yr/yr, reflecting challenging market conditions

• Company generated strong free cash flow, maintaining robust balance sheet

Outlook

• Exco previously withdrew fiscal 2026 revenue, EBITDA, and EPS targets due to tariff uncertainty in Q2

• Company expects USMCA-compliant products to remain tariff-exempt long-term

• Exco anticipates benefiting from North American reshoring trends

Result Drivers

• CUSTOMER DELAYS - Sales in the Automotive Solutions segment decreased due to customer-driven delays in program launches and unfavorable vehicle mix, as well as lower production volumes in North America and Europe

• WEAKENED DEMAND - Demand for die-cast tooling declined due to OEMs postponing new product development and launches amid soft consumer demand for EVs, political uncertainties, and tariff risks

• FOREIGN EXCHANGE IMPACT - Foreign exchange rate changes positively impacted sales by C$3.1 mln in the quarter

Key Details

Analyst Coverage

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

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy"

• Wall Street's median 12-month price target for Exco Technologies Ltd is C$7.75, about 10.6% above its July 29 closing price of C$6.93

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 6 three months ago

Press Release: ID:nGNX3Sj5pg