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▲ +2.1%Earnings analysis
Short take-aways from recent corporate results and commodity trends.
Cheniere Energy: revenue accelerated to +37.3%, but profit rose only 11.5% – minority interest and interest costs absorb the effect
LNG →
On October 29, Cheniere Energy reported third-quarter 2026 results. Revenue came in at USD 6,097 million, EBITDA at USD 2,308 million and net profit at USD 1,170 million. Revenue growth accelerated versus the second quarter (+23.5%), but net profit added only 11.5% year on year, and the net margin fell to 19.2% from 23.6%. At the current price the share looks neutral: the EV/EBITDA multiple is above its own three-year history, and profit growth lags revenue.
Key takeaways
— Revenue grew 37.3% year on year, an acceleration from +23.5% in the second quarter
— EBITDA added 46.0%, and the EBITDA margin rose to 37.9% from 35.6%
— Net profit grew only 11.5% because minority interest and interest costs took part of the operating result
— Free cash flow for the quarter was USD 1,734 million with capital expenditure of USD 732 million
— Net debt fell to USD 22.3 billion from USD 25.5 billion at the end of June
— The dividend was raised by more than 12% to USD 0.625 per share, while the annual yield remains modest at 0.7%
— EV/EBITDA of 11.0 is above its own three-year average of 9.6, meaning the share is more expensive than its history
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 4.44 | 6.10 | +37.3% |
| EBITDA | 1.58 | 2.31 | +46.0% |
| Operating profit | 1.24 | 1.92 | +54.1% |
| Net profit | 1.05 | 1.17 | +11.5% |
| Operating cash flow | 1.43 | 2.47 | +73.1% |
| Capex | 0.69 | 0.73 | +6.6% |
| EBITDA margin | 35.6% | 37.9% | +2.3 pp |
| Net margin | 23.6% | 19.2% | -4.4 pp |
Revenue grew 37.3% year on year, an acceleration from +23.5% in the second quarter
Revenue for the third quarter of 2026 was USD 6,097 million, 37.3% above the year-earlier level. In the second quarter growth was more modest at 23.5%, so the dynamics accelerated. The company attributes the increase to higher recognised LNG volumes and higher margins per million British thermal units.
The number of exported cargoes rose to 188 from 163 a year earlier, and LNG volumes shipped rose to 684 TBtu from 586. This confirms that revenue growth rests on physical volumes, not only on prices. In August the company completed the seventh train of the CCL Stage 3 project, expanding production capacity by more than 20%.
The acceleration in revenue is a strong signal, but it did not translate into profit in the same proportion. The next section shows that part of the operating result went to other holders and creditors.
EBITDA added 46.0%, and the EBITDA margin rose to 37.9% from 35.6%
EBITDA for the third quarter was USD 2,308 million, 46.0% above the year-earlier level. The EBITDA margin rose to 37.9% from 35.6% a year earlier. EBITDA growing faster than revenue means operating costs rose more slowly than income.
The company links EBITDA growth to higher LNG volumes and margins. At the same time, cost of sales rose to USD 3,207 million from USD 1,750 million, partly due to changes in the fair value of commodity derivatives. These non-cash items are excluded from adjusted EBITDA, so the operating picture looks better than GAAP gross profit.
The 2.3 percentage point margin gain is positive, but it is partly explained by revenue recognition and derivatives. The next quarter will test whether this level holds.
Net profit grew only 11.5% because minority interest and interest costs took part of the operating result
Net profit attributable to Cheniere was USD 1,170 million, 11.5% above the year-earlier level. The net margin fell to 19.2% from 23.6%. With revenue up 37.3% and EBITDA up 46.0%, this profit dynamic looks modest.
The reason lies in the structure of the result: pre-tax profit before minorities rose to USD 1,654 million from USD 1,599 million, but minority interest increased to USD 316 million from USD 247 million, and interest expense rose to USD 285 million from USD 236 million. In addition, income tax was USD 168 million versus USD 303 million a year earlier, which partly supported net profit.
Thus, the operating result grew much more than profit for Cheniere shareholders. This matters for valuation: part of the growth goes to partners in Cheniere Partners, not to holders of Cheniere shares.
Free cash flow for the quarter was USD 1,734 million with capital expenditure of USD 732 million
Operating cash flow for the third quarter was USD 2,466 million, capital expenditure – USD 732 million. Free cash flow was therefore USD 1,734 million. This is a substantial amount that covers both dividends and share buybacks.
During the quarter the company deployed about USD 1.5 billion under its capital allocation plan: it repurchased 2.8 million shares for USD 731 million, paid dividends of USD 114 million and invested USD 740 million in growth. Capital expenditure rose from USD 687 million a year earlier, linked to expansion projects.
Cash flow remains strong, but part of it goes to support growth and payouts. For dividend sustainability, not only the absolute flow but also the debt burden matters.
Net debt fell to USD 22.3 billion from USD 25.5 billion at the end of June
Net debt as of September 30, 2026 was USD 22,268 million. From June 30, 2026 it fell from USD 25.5 billion to USD 22.3 billion, a decrease of USD 3.2 billion. Over twelve months it fell from USD 24.1 billion to USD 22.3 billion.
The ratio of net debt to EBITDA over the last 12 months is 2.56. This is a moderate level for a capital-intensive business. Interest expense for the quarter was USD 285 million, which against EBITDA of USD 2,308 million leaves comfortable coverage.
The debt reduction was supported by strong cash flow and repayment of long-term obligations. In September SPL repaid about USD 54 million of senior secured notes. In October S&P upgraded Cheniere Corpus Christi Holdings to A- with a stable outlook.
The dividend was raised by more than 12% to USD 0.625 per share, while the annual yield remains modest at 0.7%
The board declared a quarterly dividend of USD 0.625 per share, more than 12% above the previous quarter. Payment is scheduled for November 17, 2026. For the third quarter the company paid dividends of USD 114 million.
The trailing twelve-month yield is 0.7%. This is a modest level explained by the high share price and the priority given to buybacks. The company repurchased 2.8 million shares for USD 731 million in the quarter, significantly more than dividend payments.
The 12% dividend increase is a positive signal, but for a shareholder the main return of capital comes through buybacks, not the dividend. At the current yield the dividend is not the main argument for the share.
EV/EBITDA of 11.0 is above its own three-year average of 9.6, meaning the share is more expensive than its history
The trailing twelve-month EV/EBITDA multiple is 11.0 against its own three-year average of 9.6. The share trades 15% above its historical valuation on this multiple. The trailing P/E is 23.1.
Revenue and EBITDA growth support the valuation, but the current multiple already reflects part of the positive. On the portal's model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, the upside to fair value is +37%. This is our own model, not a market consensus.
Further multiple expansion requires sustained profit growth, not just revenue. While net profit grows more slowly than EBITDA, the valuation remains vulnerable.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 70.3 bn USD |
| P/E (LTM) | 23.1 |
| EV/EBITDA (LTM) | 11.0 |
| P/B | 8.88 |
| Net debt / EBITDA (LTM) | 2.56 |
| Operating cash flow (LTM) | 7.18 bn |
| ROE | 73.4% |
| Dividend yield (12m) | 0.7% |
| EV/EBITDA, 3-year average | 9.6 |
Bottom line
The strong side of the report was revenue growth of 37.3% and EBITDA growth of 46.0% with the EBITDA margin rising to 37.9%. However, net profit grew only 11.5% and its margin fell to 19.2%: part of the operating result went to minorities and creditors. Cash flow remains strong, net debt fell to USD 22.3 billion, and the dividend was raised by more than 12%. The main question for a holder is whether profit can catch up with revenue while the EV/EBITDA multiple of 11.0 is above its own three-year average of 9.6. The verdict is neutral: growth in operating metrics is already largely priced in.
Weyerhaeuser: revenue accelerated to +8.4%, but profit fell by a quarter – price, not volume, did the work
WY →
On 29 October Weyerhaeuser reported third-quarter 2026 results: revenue of USD 1,862.0 million, adjusted EBITDA of USD 248.0 million and net profit of USD 61.0 million. Revenue growth accelerated to 8.4% year on year from a 0.9% decline a quarter earlier, but EBITDA fell 2.0% and net profit 23.8%, with the margin narrowing from 14.7% to 13.3%. The stock trades below its own three-year EV/EBITDA history (14.6 versus 19.4), pays a dividend yielding 4.3% and looks rather attractive, though weak profit and leverage of 3.92x EBITDA leave room for doubt.
Key takeaways
— Revenue grew 8.4% year on year, and wood products plus lumber prices delivered nearly all of the gain
— EBITDA fell 2.0% because the margin narrowed from 14.7% to 13.3%
— Net profit dropped 23.8% to USD 61.0 million, and there are no one-offs left in it
— Leverage of 3.92x EBITDA is serviced by quarterly interest expense of USD 63.0 million
— The USD 0.21 per-share dividend yields 4.3% and rests on profit before special items
— The stock is cheaper than its own history on EV/EBITDA: 14.6 versus 19.4 over three years
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 1.72 | 1.86 | +8.4% |
| EBITDA | 0.25 | 0.25 | -2.0% |
| Operating profit | 0.12 | 0.10 | -18.7% |
| Net profit | 0.08 | 0.06 | -23.8% |
| Operating cash flow | 0.21 | 0.19 | -8.1% |
| Capex | 0.59 | — | — |
| EBITDA margin | 14.7% | 13.3% | -1.4 pp |
| Net margin | 4.7% | 3.3% | -1.4 pp |
Revenue grew 8.4% year on year, and wood products plus lumber prices delivered nearly all of the gain
Third-quarter 2026 revenue was USD 1,862.0 million against USD 1,717.0 million a year earlier, up 8.4%. A quarter earlier it had fallen 0.9%, so the trend accelerated. Wood products delivered the main contribution: sales rose to USD 1,385.0 million from USD 1,228.0 million a year earlier.
Within wood products, structural lumber revenue climbed to USD 629.0 million from USD 509.0 million, and the realised price rose to USD 510 per thousand board feet from USD 405 a year earlier. Sales volume was almost flat at 1,233 versus 1,259. The gain came from price, not quantity.
Timberlands moved the other way: third-party sales fell to USD 378.0 million from USD 386.0 million. Strategic Land Solutions brought in USD 99.0 million against USD 103.0 million, with real estate sales down to USD 51.0 million from USD 62.0 million and the price per acre down to USD 3,945 from USD 5,128. The top-line growth rests on a single segment.
EBITDA fell 2.0% because the margin narrowed from 14.7% to 13.3%
Adjusted EBITDA for third-quarter 2026 was USD 248.0 million against USD 253.0 million a year earlier, down 2.0%. The margin fell from 14.7% to 13.3%. Revenue grew, so the entire effect came from cost of sales, which rose to USD 1,605.0 million from USD 1,513.0 million, and gross margin narrowed to USD 257.0 million from USD 204.0 million only nominally.
The segments diverge. Timberlands EBITDA fell to USD 133.0 million from USD 148.0 million, and Strategic Land Solutions to USD 86.0 million from USD 91.0 million. Wood products, by contrast, rose to USD 91.0 million from USD 8.0 million a year earlier, but that base included one-off charges, so the comparison is distorted.
Operating profit fell to USD 100.0 million from USD 123.0 million. It no longer contains timberland sales, which brought USD 129.0 million in the first half of 2026. Without them the profit base is thinner, and that shows in the bottom line.
Net profit dropped 23.8% to USD 61.0 million, and there are no one-offs left in it
Third-quarter 2026 net profit was USD 61.0 million against USD 80.0 million a year earlier, down 23.8%. The net margin fell from 4.7% to 3.3%. Earnings per share were USD 0.08 against USD 0.11.
There were no special items in the reported quarter at all, whereas a year earlier a lumber mill sale, an insurance recovery and timberland sales added to profit. Profit before special items was USD 61.0 million against USD 40.0 million a year earlier, so the underlying result grew, and the fall in the bottom line is explained precisely by the disappearance of one-off income.
For the nine months of 2026, profit before special items was USD 229.0 million against USD 210.0 million a year earlier. Special items added USD 150.0 million over the period, almost all of it timberland sales in the first and second quarters. That support will not repeat.
Leverage of 3.92x EBITDA is serviced by quarterly interest expense of USD 63.0 million
Net debt at the latest annual balance-sheet date was USD 5,255.0 million, or 3.92x adjusted EBITDA over the trailing twelve months. Interest expense was USD 63.0 million in third-quarter 2026 and USD 195.0 million over nine months. Against quarterly EBITDA of USD 248.0 million, interest absorbs about a quarter of the operating result.
The debt is being refinanced: in the third quarter the company raised USD 50.0 million of commercial paper and repaid USD 122.0 million of long-term debt. Current maturities on the balance sheet fell to zero, and the long-term portion rose to USD 5,354.0 million from USD 5,050.0 million at the end of 2025.
Operating cash flow was USD 193.0 million for the quarter and USD 644.0 million over nine months. Capital expenditure was USD 130.0 million for the quarter, of which USD 54.0 million went to the Monticello plant. Free cash flow after construction and interest remains modest, and the USD 151.0 million quarterly dividend is not fully covered by it.
The USD 0.21 per-share dividend yields 4.3% and rests on profit before special items
A dividend of USD 0.21 per share was paid for third-quarter 2026, the same as in each of the year's three quarters. USD 454.0 million was paid over nine months. The yield at the current price is 4.3%.
Our estimate: with profit before special items of USD 229.0 million over nine months and payouts of USD 454.0 million, the annual dividend exceeds profit before special items. Coverage rests on cash flow and on timberland sales, which brought USD 306.0 million over nine months. If such sales stop and EBITDA stays at USD 248.0 million a quarter, the payout would have to be cut or funded with debt.
A 4.3% yield is well above what short-term government debt offers, but for a stock with leverage of 3.92x EBITDA and falling profit it is not a generous premium. A further squeeze in wood-products margins or a pause in land sales could reduce the payout.
The stock is cheaper than its own history on EV/EBITDA: 14.6 versus 19.4 over three years
EV/EBITDA over the trailing twelve months is 14.6 against a three-year average of 19.4. The stock trades 25% below its own history on this multiple. P/E over the trailing twelve months is 31.5, reflecting weak profit: USD 453.0 million over twelve months against a market capitalisation of USD 14,282.4 million.
The discount is explicable: profit is falling, one-off income has gone, and leverage of 3.92x EBITDA limits room for manoeuvre. But the price already reflects the weakness. Return on equity is 6.9%, modest for a forest business, and its recovery is what would trigger a re-rating.
What to watch in the next report is the realised lumber price and the volume of land sales. The USD 510 per thousand board feet price is the main revenue driver, and a reversal would hit the margin faster than the timberlands segment could help.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 14.3 bn USD |
| P/E (LTM) | 31.5 |
| EV/EBITDA (LTM) | 14.6 |
| P/B | 1.52 |
| Net debt / EBITDA (LTM) | 3.92 |
| Operating cash flow (LTM) | 0.53 bn |
| ROE | 6.9% |
| Dividend yield (12m) | 4.3% |
| EV/EBITDA, 3-year average | 19.4 |
Bottom line
The quarter's strength was revenue: growth accelerated to 8.4% from a 0.9% decline a quarter earlier, and lumber prices rather than volume delivered it. The weakness is in profit: EBITDA down 2.0%, net profit down 23.8%, and a year earlier one-off income supported it, which is now gone. A 4.3% dividend yield and a multiple of 14.6 versus 19.4 over three years make the stock rather attractive, but leverage of 3.92x EBITDA and dividend coverage by profit before special items are the key question for a holder. The verdict is rather attractive.
Phillips 66: profit up 42-fold, almost all of it from refining at record utilisation
PSX →
On 28 October Phillips 66 reported third-quarter 2026 results. Revenue came to $50.54 bn (+46.4% year on year), net profit to $5.62 bn against $0.13 bn a year earlier, and operating cash flow to $7.28 bn. Refining made almost all of the profit: $6.03 bn pre-tax on a realised margin of $38.00 per barrel and 98% utilisation. The stock trades above its own history on EV/EBITDA (16.5 versus 13.2), and at that multiple the share looks neutral: the strong quarter is already in the price.
Key takeaways
— Revenue rose 46.4%, but growth decelerated from 53.1% a quarter earlier
— Of the $5.62 bn profit, $6.03 bn pre-tax came from refining at a $38.00 per barrel margin
— Net margin climbed to 11.1% from 0.4% a year earlier
— Net debt fell to $12.7 bn from $16.5 bn at the end of June
— Operating cash flow of $7.28 bn funded $2.78 bn of shareholder returns
— A 1.83% dividend yield is modest for the history and below the risk-free rate
— EV/EBITDA of 16.5 is 25% above its own three-year average of 13.2
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 34.5 | 50.5 | +46.4% |
| EBITDA | 2.74 | — | — |
| Operating profit | 0.96 | — | — |
| Net profit | 0.13 | 5.62 | +4122.6% |
| Operating cash flow | 1.18 | 7.28 | +518.1% |
| Capex | 0.54 | — | — |
| EBITDA margin | 7.9% | — | — |
| Net margin | 0.4% | 11.1% | +10.7 pp |
Revenue rose 46.4%, but growth decelerated from 53.1% a quarter earlier
Third-quarter 2026 revenue came to $50.54 bn, 46.4% more than a year earlier. This is the second consecutive quarter of roughly 50% growth: revenue rose 53.1% in the second quarter. Against that, the pace decelerated, although the absolute level stayed almost flat – $51.0 bn in the second quarter versus $50.5 bn in the third.
The year-earlier base was low: third-quarter 2025 revenue was $34.5 bn and was falling 2.9% year on year. Since then the company has consolidated 100% of the Borger and Wood River refineries after buying the remaining half of WRB Refining on 1 October 2025 – that changes both the base and the sales volume.
The seven-point deceleration does not point to weak demand: revenue was almost unchanged quarter on quarter, and the annual jump rests on the low base and consolidation. For the next report, holding the refining margin matters more than the revenue growth rate.
Of the $5.62 bn profit, $6.03 bn pre-tax came from refining at a $38.00 per barrel margin
Quarterly profit was $5.62 bn, or $14.08 per diluted share. Almost all of it was made in refining: the Refining segment earned $6.03 bn pre-tax against $3.06 bn in the second quarter. The realised margin rose to $38.00 per barrel from $24.08 a quarter earlier, and capacity utilisation to 98% from 96%.
The driver is named plainly in the release: wider market crack spreads. Volumes helped too – 196.1 mn barrels processed against 186.9 mn in the second quarter, with a record 848 thousand barrels per day of Central Corridor inputs. Distillate yield was also a record at 41%, and clean product yield was 86%.
The other segments weakened. Midstream earned $702 mn against $785 mn, Chemicals $311 mn against $404 mn, Marketing and Specialties $245 mn against $583 mn, and Renewable Fuels $191 mn against $544 mn. The quarter's profit rests on refining alone, and that is the main risk to its durability.
Net margin climbed to 11.1% from 0.4% a year earlier
Net margin in the third quarter was 11.1% against 0.4% in third-quarter 2025. The gap is not purely operational: a year earlier profit was almost wiped out by $948 mn of impairments on the 50% stake in WRB Refining before the buy-in.
There are almost no one-offs this quarter. Adjusted earnings were $5.62 bn against $5.62 bn reported, with a refining adjustment of just $29 mn pre-tax. The quarter's profit is therefore clean, without asset sales or tax effects that inflated some periods.
For comparison, nine-month 2026 profit was $9.67 bn, and the third quarter delivered more than half of it. That concentration means the full-year figure will depend on whether the refining margin holds in the fourth quarter.
Net debt fell to $12.7 bn from $16.5 bn at the end of June
Net debt at 30 September 2026 was $12.7 bn, $3.8 bn less than at 30 June ($16.5 bn). Over twelve months, from 30 September 2025, it fell by $7.2 bn from $19.9 bn. The reduction was funded by cash flow: cash rose to $5.85 bn from $4.10 bn.
Net debt to trailing-twelve-month EBITDA is 1.61. That is a level at which debt does not pressure payouts, but it cannot be compared with an earlier value: no earlier ratio is disclosed. Total balance-sheet debt is $18.53 bn, and debt to capital is 34%.
Interest expense fell to $187 mn from $233 mn in the second quarter, one reason for the smaller corporate-centre loss. With that load and $5.85 bn of cash, the company keeps room for payouts and capital spending.
Operating cash flow of $7.28 bn funded $2.78 bn of shareholder returns
Quarterly operating cash flow was $7.28 bn, almost the same as in the second quarter ($7.26 bn). Excluding working capital, flow was $6.19 bn against $4.32 bn a quarter earlier: the operating part is markedly stronger than a year ago.
Capital expenditure and investments were $680 mn, below $726 mn in the second quarter. Against the flow that is a small sum, leaving about $6.5 bn of free cash. Of that, $504 mn went to dividends and $2.27 bn to buybacks, for $2.78 bn returned to shareholders in total.
The $2.27 bn buyback is the largest return item and supported earnings per share. The company targets returning more than 50% of operating cash flow to shareholders; this quarter the share was about 38% of flow and above 40% of flow excluding working capital. The quarter's flow is one-off in nature – it rests on a high refining margin.
A 1.83% dividend yield is modest for the history and below the risk-free rate
Trailing-twelve-month dividend yield is 1.83%. Dividends absorbed $504 mn in the quarter against $5.62 bn of profit: the payout is covered more than tenfold, and the payout ratio on quarterly profit is very low. The company raised the dividend for the second time in 2026, as the release states, though the size of the increase is not disclosed.
Our estimate for the 2026 dividend is about $2.0 per share, based on the current quarterly payment and the announced increase; it rests on profit that this year leans on the refining margin. If the margin returns to first-half levels, profit will fall, but coverage of the payment stays many times over – the risk of a cut is small.
A 1.83% yield is below what the stock has historically offered and well below the risk-free rate. For a dividend story that is a weak argument: the investor gets little current income and pays a high multiple for it. Only a prolonged fall in refining margin and cash flow could shrink the payout, not debt – that sits at 1.61 EBITDA.
EV/EBITDA of 16.5 is 25% above its own three-year average of 13.2
On trailing-twelve-month EV/EBITDA of 16.5, the stock is more expensive than its own history: the three-year average is 13.2, so the current level is 25% above it. Trailing P/E is 8.7, which looks cheap, but the last twelve months include a record third quarter, and on a sustainable margin the multiple would be higher.
The market reaction was restrained: the share added 1.9% on the release day and the same from the release to 28 October. At $268.53 before the release, market capitalisation is about $109.8 bn. The reaction says the strong quarter was expected, and the 42-fold profit jump is the effect of a low base a year earlier.
A valuation above history, on profit that rests on refining alone, leaves little room for error. For the multiple to be justified, the $38.00 per barrel margin must hold for more than one quarter. If it returns to $24 in the fourth quarter, profit and EBITDA will fall markedly, and the current price will look expensive.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 110 bn USD |
| P/E (LTM) | 8.7 |
| EV/EBITDA (LTM) | 16.5 |
| P/B | 3.77 |
| Net debt / EBITDA (LTM) | 1.61 |
| Operating cash flow (LTM) | 15.0 bn |
| ROE | 68.2% |
| Dividend yield (12m) | 1.8% |
| EV/EBITDA, 3-year average | 13.2 |
Bottom line
The quarter is genuinely strong: $5.62 bn of profit, an 11.1% net margin, $7.28 bn of cash flow and $12.7 bn of net debt at 1.61 EBITDA. But refining did almost all of it, at record utilisation and a $38.00 per barrel margin, while the other segments weakened. There are almost no one-offs in profit, which is a plus, yet the durability of the result rests on one factor – crack spreads. At EV/EBITDA of 16.5 against its own 13.2 average the stock is priced above history, and the 1.83% dividend yield is weak. The verdict is neutral: the strong report is already in the price, and a second strong margin quarter is needed to improve the rating.
COMM_AU: profit nearly doubled, but the whole gain rests on one fat margin
AU →
Q2 2026 results showed revenue of $3.10bn (+27.0% YoY), EBITDA of $1.70bn (+55.8%) and net profit of $1.19bn (+47.9%). The EBITDA margin rose to 54.7% from 44.6% a year earlier, and the net margin to 38.4% from 33.0%. With a P/E LTM of 9.8 and net debt of minus $1.2bn, the share looks rather attractive, but the key question is whether this margin holds.
Key takeaways
— Revenue added 27.0% YoY to $3.10bn, and the whole gain landed in the second quarter
— EBITDA rose 55.8% because the margin climbed to 54.7% from 44.6%
— Net profit added 47.9% to $1.19bn on a 38.4% net margin
— Operating cash flow of $1.43bn covers profit rather than lagging it
— Net debt flipped sign: from $0.1bn on 30 June 2025 to minus $1.2bn on 30 June 2026
— A P/E LTM of 9.8 and EV/EBITDA LTM of 6.7 leave room, and the portal model shows +15% upside
— A 54.5% return on equity with almost no debt load is the main argument for the share
Attractiveness
Key figures, USD bn
| Metric | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Revenue | 2.44 | 3.10 | +27.0% |
| EBITDA | 1.09 | 1.70 | +55.8% |
| Operating profit | 1.00 | 1.58 | +58.5% |
| Net profit | 0.81 | 1.19 | +47.9% |
| Operating cash flow | 1.02 | 1.43 | +40.7% |
| EBITDA margin | 44.6% | 54.7% | +10.1 pp |
| Net margin | 33.0% | 38.4% | +5.4 pp |
Revenue added 27.0% YoY to $3.10bn, and the whole gain landed in the second quarter
In Q2 2026 revenue was $3.10bn against $2.45bn a year earlier – growth of 27.0%. This is the only stretch in the available history where revenue topped $3bn twice in a row: Q1 had $3.24bn.
The quarterly sequence shows the growth is not a one-off: $2.45bn in Q2 2025, $2.42bn in Q3, $3.07bn in Q4, $3.24bn in Q1 2026 and $3.10bn in Q2. The level above $3bn has held for three quarters running.
For a holder this means the top line is no longer the weak spot. The question is now how much of the profit survives when the margin returns to normal.
EBITDA rose 55.8% because the margin climbed to 54.7% from 44.6%
EBITDA in Q2 2026 was $1.70bn against $1.09bn a year earlier, growth of 55.8%. With revenue up 27.0%, a jump like that can only come from margin: it rose to 54.7% from 44.6%.
Operating profit rose to $1.58bn from $999m, or 58.5%. The gap between EBITDA and operating profit is small; depreciation takes about $115m a quarter – little for a company of this size.
A margin above 50% is rare in most industries, and the durability of that level is the main risk in the report. If half the EBITDA gain came from a one-off, the next report will show the pullback.
Net profit added 47.9% to $1.19bn on a 38.4% net margin
Net profit in Q2 2026 was $1.19bn against $806m a year earlier, growth of 47.9%. The net margin rose to 38.4% from 33.0%.
Profit grows slower than EBITDA (47.9% versus 55.8%) because below the operating line costs rose faster than revenue. The gap between operating profit of $1.58bn and net profit of $1.19bn is about $390m for interest, taxes and other items.
For valuation the level of profit matters less than the fact that it was earned on $3.10bn of revenue. Earnings against a market cap of $43.8bn give a P/E LTM of 9.8 – below most companies with such profitability.
Operating cash flow of $1.43bn covers profit rather than lagging it
Operating cash flow in Q2 2026 was $1.43bn against $1.02bn a year earlier. It exceeds net profit of $1.19bn, so profit is backed by cash rather than receivables.
Over the last twelve months operating flow reached $6.18bn against LTM net profit of $4.48bn and LTM EBITDA of $6.43bn. The flow is almost equal to EBITDA – a rare quality for a company with such a margin.
Capex is not in the report, so free cash flow cannot be calculated. But with flow above profit and a growing cash pile, the company funds itself, which removes the question of debt burden.
Net debt flipped sign: from $0.1bn on 30 June 2025 to minus $1.2bn on 30 June 2026
On 30 June 2026 net debt was minus $1.2bn, meaning cash exceeds debt. A year earlier, on 30 June 2025, it was $0.1bn – a change over 12 months of minus $1.3bn.
Within the year the move is steady: from minus $1.1bn on 31 March 2026 to minus $1.2bn on 30 June, a change of minus $0.1bn for the quarter. Debt was not repaid in one go – cash grew with profit.
The ratio of net debt to LTM EBITDA is minus 0.19. A negative value means net cash, not leverage. For a holder this is a buffer: the company can ride out a weak quarter without going to the market.
A P/E LTM of 9.8 and EV/EBITDA LTM of 6.7 leave room, and the portal model shows +15% upside
With a market cap of $43.8bn and LTM profit of $4.48bn, the P/E LTM is 9.8. EV/EBITDA LTM is 6.7. For a company with a 54.5% return on equity and net cash, that is not expensive.
On the portal's model, where EBITDA is repriced at current commodity prices at the target EV/EBITDA, the upside of the share to fair value is +15%. This is our own estimate, not a market consensus.
The room comes from the gap between profit and price: the market does not pay full value for a margin above 50% because it doubts its durability. If the margin holds for two more quarters, the multiple will be re-rated.
A 54.5% return on equity with almost no debt load is the main argument for the share
Return on equity is 54.5%. That level is not achieved through debt: net debt is negative, at minus 0.19 of LTM EBITDA. Profit is earned on equity, not on borrowings.
The combination of high profitability and net cash is rare. Usually a company either grows on debt or sits on cash without a return. Here both conditions hold at once.
That is what makes the share interesting at a P/E of 9.8. If profit falls by a quarter, the multiple rises to 13 – still acceptable. There is a margin of safety in the valuation.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 43.8 bn USD |
| P/E (LTM) | 9.8 |
| EV/EBITDA (LTM) | 6.7 |
| P/B | 11.80 |
| Net debt / EBITDA (LTM) | -0.19 |
| Operating cash flow (LTM) | 6.18 bn |
| ROE | 54.5% |
Bottom line
The strong side of the report is not the 27.0% revenue growth but the fact that profit is backed by cash: operating flow of $1.43bn exceeds net profit of $1.19bn. Net cash of $1.2bn and a 54.5% return on equity make the company resilient to a weak quarter. The weak spot is the 54.7% margin: the market does not pay full value for it, and the P/E of 9.8 reflects that doubt. The question for a holder now is whether the margin holds for two more quarters – if it does, the multiple will be re-rated and the portal model's +15% upside will prove conservative.
Gerdau: EBITDA up 41.4%, but the multiple is already above its own history
GGB →
Gerdau reported third-quarter 2026 revenue of USD 3,629.6 mn, EBITDA of USD 681.9 mn and net profit of USD 301.8 mn. Year on year revenue rose 8.6%, EBITDA 41.4% and net profit 49.0%, while the EBITDA margin climbed to 18.8% from 14.4%. Yet EV/EBITDA over the last twelve months stands at 5.5x, 21% above its own three-year average of 4.5x, so at the current price the share looks neutral: operating growth and low leverage are already largely priced in.
Key takeaways
— Revenue rose 8.6% year on year, but growth decelerated from 12.0% a quarter earlier
— EBITDA rose 41.4% on an 18.8% margin versus 14.4% a year earlier
— Net profit rose 49.0%, lifting the net margin to 8.3% from 6.1%
— Leverage at 0.82x EBITDA remains low, and net debt barely changed over the year
— Free cash flow after capex covers the 2.2% dividend yield
— EV/EBITDA at 5.5x is 21% above its own three-year average of 4.5x
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 3.34 | 3.63 | +8.6% |
| EBITDA | 0.48 | 0.68 | +41.4% |
| Operating profit | 0.31 | 0.52 | +70.1% |
| Net profit | 0.20 | 0.30 | +49.0% |
| Operating cash flow | 0.54 | 0.52 | -3.6% |
| Capex | 0.33 | — | — |
| EBITDA margin | 14.4% | 18.8% | +4.4 pp |
| Net margin | 6.1% | 8.3% | +2.2 pp |
Revenue rose 8.6% year on year, but growth decelerated from 12.0% a quarter earlier
In the third quarter of 2026 Gerdau's revenue reached USD 3,629.6 mn, 8.6% above the same quarter a year earlier. Growth continued but decelerated: in the second quarter the year-on-year rate was 12.0%. The slowdown comes off a high base – the year-earlier quarter was already growing 10.8%.
The quarterly sequence is uneven: 6.2% in Q2 2025, 10.8% in Q3, 13.8% in Q4, 7.8% in Q1 2026, 12.0% in Q2 and 8.6% in Q3. That pattern points to demand sensitive to the external environment rather than a smooth trend.
What matters more than the rate itself is that revenue has held above USD 3.5 bn for three consecutive quarters. That supports capacity utilisation and price pass-through into margin, which is visible in the profit line.
EBITDA rose 41.4% on an 18.8% margin versus 14.4% a year earlier
EBITDA for the third quarter of 2026 was USD 681.9 mn, 41.4% above the year-earlier level. The EBITDA margin rose to 18.8% from 14.4%, so profit growth outpaces revenue growth almost fivefold.
Operating profit was USD 524.1 mn. The USD 157.8 mn gap between EBITDA and operating profit is depreciation, which does not scale with revenue. That is why the margin expands faster than pricing alone would allow.
The durability of that margin is the main question for the report. If the expansion came from product prices, it can reverse with the market. If it came from utilisation and cost structure, it will hold longer. The report does not break this out, so the next quarter will show whether 18.8% is a new benchmark or a peak.
Net profit rose 49.0%, lifting the net margin to 8.3% from 6.1%
Net profit for the third quarter of 2026 was USD 301.8 mn, 49.0% above the year-earlier figure. The net margin rose to 8.3% from 6.1%.
Profit growing faster than EBITDA reflects financial costs and taxes not scaling proportionally with the operating result. With net profit of USD 301.8 mn and EBITDA of USD 681.9 mn, interest, taxes and other items account for USD 380.1 mn – less than half of EBITDA.
Over the last twelve months net profit was USD 354.3 mn on revenue of USD 13,600.0 mn. The quarterly result of USD 301.8 mn is the bulk of the annual profit, underlining how important the third quarter was for the full-year outcome.
Leverage at 0.82x EBITDA remains low, and net debt barely changed over the year
Net debt at 30 September 2026 was USD 1,560.0 mn. The ratio of net debt to EBITDA over the last twelve months is 0.82, a comfortable level for a steel producer with cyclical demand.
Net debt barely moved over the quarter: from USD 1,598.6 mn at 30 June 2026 to USD 1,560.0 mn at 30 September, a reduction of USD 38.5 mn. Over twelve months it went from USD 1,629.6 mn at 30 September 2025 to USD 1,560.0 mn, a reduction of USD 69.6 mn. Debt is being serviced but not rapidly reduced.
Operating cash flow for the third quarter was USD 523.7 mn, comparable to EBITDA. Working capital is not consuming profit, leaving room for investment and shareholder returns.
Free cash flow after capex covers the 2.2% dividend yield
Operating cash flow for the third quarter of 2026 was USD 523.7 mn. Capex for the quarter is not disclosed in the facts, but recent quarters have ranged from USD 217 mn to USD 333 mn: USD 217.1 mn in Q2 2026 and USD 240.2 mn in Q1.
On that range, free cash flow for the quarter stays positive and runs into the hundreds of millions of dollars. That is enough to fund dividends without adding debt.
The trailing twelve-month dividend yield is 2.2%. Against a market capitalisation of USD 8,907.9 mn, payouts are about USD 197 mn. That is modest relative to quarterly cash flow, but the yield is also low relative to the risk-free rate.
The dividend policy is not in the facts, so the sustainability of the payout depends on cash flow holding at current levels. If EBITDA halves, free cash flow after capex could fall to zero and the payout would come under question.
EV/EBITDA at 5.5x is 21% above its own three-year average of 4.5x
EV/EBITDA over the last twelve months is 5.5x against its own three-year average of 4.5x. The share trades 21% above its usual level relative to its own history. That is the main argument against buying at the current level.
P/E over the last twelve months is 25.1x. With net profit of USD 354.3 mn and a market capitalisation of USD 8,907.9 mn, that reflects profit that was strong in the third quarter but modest for the year overall. The market is paying for the quarterly result, not the annual one.
Return on equity is 11.4%. That is decent for a steel company but not the level that justifies a premium to its own history. For the multiple to return to its average, either EBITDA must grow or the price must fall.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 8.91 bn USD |
| P/E (LTM) | 25.1 |
| EV/EBITDA (LTM) | 5.5 |
| P/B | 0.91 |
| Net debt / EBITDA (LTM) | 0.82 |
| Operating cash flow (LTM) | 1.70 bn |
| ROE | 11.4% |
| Dividend yield (12m) | 2.2% |
| EV/EBITDA, 3-year average | 4.5 |
Bottom line
The quarter was strong: EBITDA rose 41.4%, the margin climbed to 18.8% and net profit rose 49.0%. Leverage at 0.82x EBITDA and operating cash flow of USD 523.7 mn confirm that growth converts into cash. But revenue growth decelerated from 12.0% to 8.6%, and EV/EBITDA at 5.5x is already 21% above its own three-year average. At the current price the share looks neutral: the operating achievements are real, but the valuation leaves little cushion if the margin reverses.
National Oilwell Varco: revenue grows for the first time in a year, but profit leans on one-offs and tariff refunds
NOV →
On 28 October National Oilwell Varco reported third-quarter 2026 results: revenue of $2,226 million rose 2.3% year over year after a 2.5% decline the quarter before, company-adjusted EBITDA reached $281 million, and net income came in at $90 million versus $42 million a year earlier. Reported EBITDA on our data is $235 million, and it carries one-offs: a $5 million tariff refund, $18 million of fixed-asset write-downs and $28 million of other items. The stock fell 6.2% after the release and trades at 10.8x EV/EBITDA against its own three-year average of 7.4 – at that multiple, with profit this one-off-heavy, the share looks rather unattractive.
Key takeaways
— Revenue grew for the first time in a year, up 2.3%, carried by the energy products and services segment
— The company's adjusted EBITDA of $281 million is $46 million above our reported figure, and the gap is one-offs
— Reported EBITDA margin rose to 10.6% from 9.0%, but part of the lift came from tariff refunds
— Free cash flow for the quarter was negative – minus $47 million on $88 million of capex
— Net debt of $0.6 billion is 0.91x trailing-twelve-month EBITDA, and it fell $0.5 billion over the year
— Capital equipment backlog of $3.98 billion with a 91% book-to-bill – orders came in below shipments
— The 10.8x EV/EBITDA multiple is 46% above its own three-year average of 7.4
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 2.18 | 2.23 | +2.3% |
| EBITDA | 0.20 | 0.23 | +19.9% |
| Operating profit | 0.11 | 0.14 | +32.7% |
| Net profit | 0.04 | 0.09 | +114.3% |
| Operating cash flow | 0.35 | 0.04 | -88.4% |
| Capex | 0.11 | 0.09 | -17.8% |
| EBITDA margin | 9.0% | 10.6% | +1.6 pp |
| Net margin | 1.9% | 4.0% | +2.1 pp |
Revenue grew for the first time in a year, up 2.3%, carried by the energy products and services segment
Third-quarter 2026 revenue was $2,226 million, up 2.3% from $2,176 million a year earlier. The top line had fallen for four straight quarters: down 1.3% in Q2 2025, down 0.7% in Q3, down 1.3% in Q4, down 2.4% and 2.5% in the first two quarters of 2026. So the current 2.3% is a reversal after a year of decline, not a continuation of growth.
All of the increase came from the energy products and services segment: its revenue rose 9% year over year to $1,057 million on higher manufacturing throughput against a growing backlog of drill pipe and composite equipment. Energy equipment, by contrast, fell 2% to $1,220 million as certain offshore projects wrapped up. Inter-segment eliminations rose from $42 million to $51 million and partly offset the gain.
Sequential momentum is also positive: revenue rose 4% from the prior quarter. But the year-over-year rate remains modest at 2.3% after a decline the quarter before. Whether the reversal holds depends on manufacturing throughput in the products and services segment.
The company's adjusted EBITDA of $281 million is $46 million above our reported figure, and the gap is one-offs
The company reports adjusted EBITDA of $281 million, or 12.6% of sales, versus $258 million a year earlier. Our reported EBITDA for the same quarter is $235 million. The $46 million gap is the items the company excludes: $28 million of other items (mainly severance and inventory write-downs), $18 million of net fixed-asset write-downs from facility closures, and a $5 million tariff refund.
Some of these are real cash, not accounting adjustments. Fixed-asset and inventory write-downs reflect facility closures, meaning the company is shrinking its asset base. The $5 million tariff refund is a one-time gain that may not repeat next quarter; a quarter earlier such refunds were $40 million, so the stream is fading.
For judging earnings quality, reported EBITDA of $235 million matters more than the adjusted figure. The $46 million gap is 20% of the reported number and will not recur at the same size.
Reported EBITDA margin rose to 10.6% from 9.0%, but part of the lift came from tariff refunds
Reported EBITDA margin in Q3 2026 was 10.6% versus 9.0% a year earlier; net margin was 4.0% versus 1.9%. Operating profit rose 33% year over year to $142 million, or 6.4% of sales. Gross margin rose to 19.7% from 18.9%.
Part of the margin lift is operational: in energy equipment, adjusted EBITDA margin widened to 15.3% from 14.4% on a favourable project mix and better backlog margins; in products and services it rose to 14.5% from 13.9% on a lower cost base. But the reported margin also carries the $5 million tariff refund and the one-off items the company excludes.
The company's adjusted EBITDA margin is 12.6% versus 11.9% a year earlier. The gap between 12.6% and our 10.6% is those same one-offs. Whether margin holds above 10% depends on manufacturing throughput and on whether tariff refunds disappear entirely.
Free cash flow for the quarter was negative – minus $47 million on $88 million of capex
Operating cash flow in Q3 2026 was $41 million; capex was $88 million. Free cash flow, by the company's own calculation, was negative: minus $47 million. Over nine months, operating cash flow was $32 million, capex $234 million, free cash flow minus $202 million.
The cause is working capital: it absorbed $251 million in the quarter and $646 million over nine months. The company is building inventories ($1,956 million versus $1,799 million at end-2025) and contract assets ($736 million versus $596 million), so ramping production against the backlog requires cash up front.
For shareholders this means profit is not yet converting into free cash: the $47 million of dividends and buybacks in the quarter is funded from the cash balance, not from cash flow. Cash has fallen from $1,552 million to $1,058 million since the start of the year.
Net debt of $0.6 billion is 0.91x trailing-twelve-month EBITDA, and it fell $0.5 billion over the year
Net debt at 30 September 2026 was $649 million, or 0.91x trailing-twelve-month EBITDA. At the prior reporting date, 30 June 2026, it was $0.5 billion, so it rose $0.1 billion. A year earlier, 30 September 2025, net debt was $1.1 billion – down $0.5 billion over 12 months.
Total debt is $1,710 million, of which $1,694 million is long-term; cash is $1,058 million. $1,500 million is available on the revolver, so liquidity is adequate. Interest expense was $21 million in the quarter and $64 million over nine months.
At 0.91x EBITDA, leverage is low for the sector and poses no threat to the dividend. But the $0.1 billion rise in net debt over the quarter, alongside negative free cash flow, shows the company is partly funding working capital and payouts from the balance sheet.
Capital equipment backlog of $3.98 billion with a 91% book-to-bill – orders came in below shipments
New orders in Q3 2026 totalled $577 million, or 91% of the $632 million shipped from backlog. Capital equipment backlog at 30 September was $3.98 billion. So the backlog shrank over the quarter: shipments exceeded bookings.
The company attributes this to completed offshore projects and expects a moderation in Middle East activity in Q4 as some customers adjust drilling programmes. That is a direct risk to manufacturing throughput in the products and services segment, which drove the quarter's revenue.
Q4 guidance: revenue roughly flat year over year, adjusted EBITDA between $260 million and $300 million. Against $281 million in Q3, the company is assuming the level holds rather than grows.
The 10.8x EV/EBITDA multiple is 46% above its own three-year average of 7.4
On trailing-twelve-month EV/EBITDA the stock trades at 10.8x against its own three-year average of 7.4. That is 46% above history – the share is more expensive than usual on this multiple. Trailing P/E is 56.1, reflecting a low profit base: $124 million over 12 months against a $6,953 million market cap.
Trailing dividend yield is 2.26%. In the quarter the company paid $32 million of dividends and bought back $15 million of stock, returning $47 million to shareholders. With free cash flow at minus $47 million for the quarter, the payouts are funded from cash.
With the multiple above its own history and profit 20% one-off, valuation looks stretched. To justify it, the company needs to sustain revenue growth and turn free cash flow positive – neither is yet confirmed.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 6.95 bn USD |
| P/E (LTM) | 56.1 |
| EV/EBITDA (LTM) | 10.8 |
| P/B | 1.11 |
| Net debt / EBITDA (LTM) | 0.91 |
| ROE | 5.8% |
| Dividend yield (12m) | 2.3% |
| EV/EBITDA, 3-year average | 7.4 |
Bottom line
What was genuinely strong: revenue grew for the first time in a year, up 2.3%, an acceleration after a 2.5% decline the quarter before, and reported EBITDA margin rose to 10.6% from 9.0%. But profit is 20% one-off, free cash flow is negative, and orders came in below shipments. At 10.8x EV/EBITDA against its own three-year average of 7.4, the share is priced above its history, and a 2.26% dividend yield does not compensate. Verdict: rather unattractive – the revenue reversal is real but not yet converting into cash, and valuation already discounts more than the company delivered.
UFP Industries: revenue accelerated to +11.1%, but $19 million of freight ate almost all the profit
UFPI →
On October 28 UFP Industries reported third-quarter 2026 results: revenue of $1,732.8 million (+11.1% YoY), adjusted EBITDA of $119.3 million (−10.5%), net profit of $58.0 million (−20.1%). Top-line growth accelerated from +2.6% in the second quarter, but the EBITDA margin compressed from 8.5% to 6.9% as $19 million of higher freight and lumber costs absorbed the volume effect. With EV/EBITDA at 9.1 versus its own three-year average of 8.8 and the portal model showing −73% upside, the share looks unattractive at the current price.
Key takeaways
— Revenue rose 11.1% to $1,732.8 million, and nearly half of the gain came from prices rather than volumes
— Organic units added 4%, and growth rests on four business units rather than the whole portfolio
— Freight costs rose $19 million and alone took 1.3 percentage points of margin
— The EBITDA margin compressed from 8.5% to 6.9%, with packaging hit hardest
— Net profit fell 20.1% to $58.0 million despite revenue growth
— Leverage is negative: net debt of −$557.4 million and net debt/EBITDA LTM of −1.26
— The dividend was raised 3% to $0.36 per share, but the 1.8% yield does not catch the risk-free rate
— EV/EBITDA of 9.1 is in line with its own three-year average of 8.8, while the portal model shows −73%
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 1.56 | 1.73 | +11.1% |
| EBITDA | 0.13 | 0.12 | -10.5% |
| Operating profit | 0.09 | 0.07 | -24.3% |
| Net profit | 0.07 | 0.06 | -20.1% |
| Operating cash flow | 0.28 | — | — |
| Capex | 0.08 | — | — |
| EBITDA margin | 8.5% | 6.9% | -1.6 pp |
| Net margin | 4.6% | 3.3% | -1.3 pp |
Revenue rose 11.1% to $1,732.8 million, and nearly half of the gain came from prices rather than volumes
Third-quarter 2026 revenue was $1,732.8 million versus $1,559.6 million a year earlier, up 11.1%. That is an acceleration from the second quarter, when revenue added 2.6%: the company has exited the decline that ran from Q4 2024 through Q1 2026.
The press release breaks the gain down as 4% organic units, 2% acquisitions and 5% selling prices. Nearly half of the revenue growth therefore came from price increases rather than physical demand. Organic growth of 4% is a recovery from zero a year earlier, but it is still short of pre-crisis rates.
The segments are uneven. Retail added 6.8% to $634.5 million, Packaging 18.0% to $465.8 million, Construction 11.3% to $552.4 million. Within Retail, Deckorators grew 21% in organic units while ProWood declined 4% on weak consumer sentiment. In Packaging, Structural Packaging added 14% while PalletOne managed only 1% organically.
Organic units added 4%, and growth rests on four business units rather than the whole portfolio
Organic growth of 4% came from four units: Site Built (+12%), Commercial (+20%), Structural Packaging (+14%) and Deckorators (+21%). The rest either stagnated or fell: Factory Built lost 10% on the exit from low-margin commodity sales, ProWood fell 4%, and UFP Edge was flat.
That skew means overall growth rests on a few points rather than a broad demand recovery. In Construction, Site Built's 12% gain partly offset Factory Built's decline, but the segment's overall organic growth was only 4%. In Retail, flat ProWood and stagnant Edge outweighed Deckorators' success.
New products rose to 8.7% of sales from 6.8% a year earlier – one of the few metrics that improved. The company attributes this to Deckorators, Structural Packaging and Construction value-added. But new products are not yet a sufficient counterweight to weakness in the core markets.
Freight costs rose $19 million and alone took 1.3 percentage points of margin
Transportation costs, net of fuel surcharges and price adjustments, rose $19 million, or 1.3% of sales, year over year. Spot rates excluding fuel rose 30% during the quarter before stabilising at an elevated level. The cause is tightening carrier capacity as smaller players exited the market.
That sum is almost equal to the entire quarterly operating profit of $70.2 million. Without the freight increase, profit would have been materially higher, and it was transport, not volumes or prices, that determined the weak result. The company names freight and lumber as the main reasons for the profit decline.
The segment breakdown confirms it: in Retail, freight added $8 million of costs; in Packaging, transport and material costs rose in every unit. In Construction, freight pressure combined with competitive pricing at Site Built. The company has no single offsetting mechanism: it passes some costs into prices, but not all.
The EBITDA margin compressed from 8.5% to 6.9%, with packaging hit hardest
Adjusted EBITDA was $119.3 million, or 6.9% of sales, versus $140.0 million and 8.5% a year earlier. A 10.5% decline alongside 11.1% revenue growth is the classic gap where costs outrun sales. Gross profit fell to $244.9 million from $262.7 million, and gross margin to 14.1% from 16.8%.
Among segments, Packaging fell hardest: EBITDA of $27.3 million, −20.5%, margin 5.8% versus 8.7%. The cause is higher transport and material costs in every unit. Retail posted EBITDA of $34.1 million, −14.7%, margin 5.4% versus 6.7%. Construction – $37.7 million, −10.0%, margin 6.8% versus 8.4%.
The margin decline was uneven: Construction suffered least thanks to improved gross profit at Commercial and Concrete Forming. But the overall result is the same – the company could not hold profitability while revenue grew. That is the report's central contradiction: sales rise, profitability falls.
Net profit fell 20.1% to $58.0 million despite revenue growth
Net profit attributable to controlling interests was $58.0 million versus $75.3 million a year earlier, down 20.1%. Diluted earnings per share were $1.05 versus $1.29. Net margin compressed to 3.3% from 4.6%.
Operating profit fell to $70.2 million from $89.5 million, or 21.6%. Interest and other expenses declined to $6.7 million from $9.7 million – the company earns interest income on its cash pile. But that did not offset the operating profit decline.
There are few one-off items distorting the picture: net gain on disposition and impairment of assets was $3.2 million versus a $2.5 million loss a year earlier. So profit fell not because of one-off write-offs but because of fundamental cost pressure. That makes the result more worrying, not less.
Leverage is negative: net debt of −$557.4 million and net debt/EBITDA LTM of −1.26
Net debt at the latest annual balance sheet was −$557.4 million, meaning the cash cushion exceeds debt. Net debt to EBITDA over the last twelve months was −1.26. That is a level, not a trend: comparison with a prior period is not available, but a negative value by itself means the company does not depend on borrowed funds.
Liquidity is about $2.0 billion, including more than $677 million of cash and $1.3 billion of available credit lines. In October the company extended its $750 million revolving credit facility to 2031. Operating cash flow for the first nine months of 2026 was $235 million, and free cash flow was $287 million.
Free cash flow went into buybacks: 2.17 million shares were repurchased in the first nine months for $182.7 million at an average price of $84.24. That is above the current price of $79.92, so the company bought back shares at a higher price than they trade at now. The remaining programme is $198 million through April 2027.
The dividend was raised 3% to $0.36 per share, but the 1.8% yield does not catch the risk-free rate
On October 21 the board declared a quarterly dividend of $0.36 per share, payable December 15, 2026. That is 3% above the 2025 quarterly rate of $0.35. The trailing twelve-month dividend yield is 1.8% at the current price.
Our estimate: at the $0.36 quarterly rate, the annual dividend would be $1.44 per share. This is our calculation from the declared rate, not company guidance. It rests on LTM profit of $231.6 million and free cash flow of $287 million for nine months – the payout ratio remains low, and the company has room to raise payments.
A 1.8% yield is below the risk-free rate, and that is the main argument against the dividend story as a reason to buy the share. The company raised the dividend by only 3% – slower than inflation and slower than revenue growth. For an investor who needs income, this stock does not fit: the payment is small relative to the price, and dividend growth is modest.
EV/EBITDA of 9.1 is in line with its own three-year average of 8.8, while the portal model shows −73%
EV/EBITDA over the last twelve months is 9.1, 4% above its own three-year average of 8.8. That is in line with history, neither cheaper nor dearer. P/E LTM is 19.9, market capitalisation $4,616.4 million, and ROE 10.8%.
The portal model re-prices EBITDA at current commodity prices at the target EV/EBITDA and, against market capitalisation, shows −73% upside. This is our own estimate, not market consensus and not a target price. It means that at current lumber prices and current margins the share is worth materially less than its cash flow justifies.
The market reacted to the report with a decline: the share lost 2.0% on the publication day and has stayed there since. The closing price before the report was $79.92. The reaction was restrained but reflects disappointment: revenue growth did not translate into profit growth, and investors saw it.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 4.62 bn USD |
| P/E (LTM) | 19.9 |
| EV/EBITDA (LTM) | 9.1 |
| P/B | 1.51 |
| Net debt / EBITDA (LTM) | -1.26 |
| ROE | 10.8% |
| Dividend yield (12m) | 1.8% |
| EV/EBITDA, 3-year average | 8.8 |
Bottom line
The report's strength is revenue: +11.1% with acceleration from the second quarter and 4% organic volume growth. The weakness is profit: EBITDA −10.5%, net profit −20.1%, margin compressed from 8.5% to 6.9%. $19 million of freight and lumber costs absorbed the volume effect, and the company has not yet found a full offset. Leverage is negative and the dividend is growing, but the 1.8% yield does not catch the risk-free rate. With EV/EBITDA at 9.1 in line with its own history and the portal model at −73%, the share looks unattractive at the current price.
TORM: profit nearly sextupled, but the multiple is already above its own history
TRMD →
TORM's Q2 2026 results showed revenue of $662.8m – up 110.3% year on year – EBITDA of $417.8m and net profit of $338.3m. The EBITDA margin reached 63.0% versus 41.3% a year earlier, and the net margin 51.0% versus 18.6%. Yet the share trades at EV/EBITDA LTM 5.4 against its own three-year average of 4.4, 23% above its history, and with a dividend yield of 10.6% the valuation looks neutral: the strong report is already in the price.
Key takeaways
— Q2 revenue rose 110.3% year on year to $662.8m, more than double the first quarter
— EBITDA grew 220.6% year on year and the margin rose to 63.0% from 41.3% – profit growth outpaced revenue growth
— Net profit rose 477.3% year on year to $338.3m, with a net margin of 51.0% versus 18.6%
— Leverage of 0.75x EBITDA LTM is comfortable, and net debt fell from $0.9bn on 31 March to $0.7bn on 30 June
— A trailing dividend yield of 10.6% remains the main support for a holder
— EV/EBITDA LTM of 5.4 versus a three-year average of 4.4 – the share is 23% above its own history
Attractiveness
Key figures, USD bn
| Metric | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Revenue | 0.32 | 0.66 | +110.3% |
| EBITDA | 0.13 | 0.42 | +220.6% |
| Operating profit | 0.07 | 0.36 | +413.2% |
| Net profit | 0.06 | 0.34 | +477.3% |
| Operating cash flow | 0.16 | 0.32 | +98.1% |
| EBITDA margin | 41.3% | 63.0% | +21.7 pp |
| Net margin | 18.6% | 51.0% | +32.4 pp |
Q2 revenue rose 110.3% year on year to $662.8m, more than double the first quarter
TORM's Q2 2026 revenue was $662.8m, up 110.3% year on year. For comparison, first-quarter revenue was $402.0m, so the second quarter was 1.6 times larger. That step up stands out sharply against the previous four quarters, when revenue stayed in the $315–403m range.
The acceleration is visible in profit too: EBITDA grew 220.6% year on year and net profit 477.3%. That means revenue growth was accompanied by disproportionately larger profit growth, so the business's margin was substantially higher this quarter than a year earlier.
Over the trailing twelve months revenue was $1,800.0m, and the second quarter alone contributed more than a third of that. Such a contribution from one quarter shows that current dynamics differ markedly from the annual average, and it is these dynamics that drive the year-on-year comparison.
EBITDA grew 220.6% year on year and the margin rose to 63.0% from 41.3% – profit growth outpaced revenue growth
Q2 2026 EBITDA was $417.8m, up 220.6% year on year. The EBITDA margin reached 63.0% versus 41.3% a year earlier – a rise of 21.7 percentage points. This is the key change in the report: profitability at the EBITDA level grew faster than revenue.
Operating profit was $355.1m, also well above the prior-year level of $69.2m. The gap between EBITDA and operating profit is small, which suggests depreciation does not absorb a significant part of the result.
A 21.7 pp margin increase on more than doubled revenue means the company did not just grow volumes but earned a higher return on every dollar of revenue. The facts do not disclose the cause of this shift, but the scale of the change makes it the main event of the quarter.
Net profit rose 477.3% year on year to $338.3m, with a net margin of 51.0% versus 18.6%
Q2 2026 net profit was $338.3m, up 477.3% year on year. The net margin reached 51.0% versus 18.6% a year earlier. That means more than half of revenue turned into net profit, an exceptionally high figure for a shipping company.
Over the trailing twelve months net profit was $625.1m. The second quarter alone contributed more than half of that, underscoring its decisive role in the annual result. Quarterly profit is more than double the profit for the whole of the previous year combined.
Return on equity (ROE) stands at 56.1%, a very high level reflecting both strong profit and a relatively small capital base. Such an ROE is sensitive to any decline in profit, so the sustainability of the quarterly result is of primary importance.
Leverage of 0.75x EBITDA LTM is comfortable, and net debt fell from $0.9bn on 31 March to $0.7bn on 30 June
Net debt at 30 June 2026 was $708.0m, or $0.7bn. The ratio of net debt to trailing-twelve-month EBITDA is 0.75, a low and comfortable level for a shipping company. Such headroom allows the company to withstand market fluctuations without threatening financial stability.
Compared with 31 March 2026, net debt fell from $0.9bn to $0.7bn. Over twelve months, from 30 June 2025, the change was $0.0bn – debt stayed at $0.7bn. The quarterly decline came against strong operating cash flow of $319.5m.
Operating cash flow for the quarter was $319.5m, almost matching net profit. That means profit is backed by real cash rather than accounting accruals. Over the trailing twelve months operating cash flow was $709.9m, further confirming the business's ability to generate cash.
A trailing dividend yield of 10.6% remains the main support for a holder
The trailing twelve-month dividend yield is 10.6%. That is a high level and provides a substantial part of the share's total return. With trailing-twelve-month net profit of $625.1m and a market capitalisation of $4,226.6m, the dividend payout looks covered.
Our estimate of the current-year dividend assumes the payout ratio and profit remain at the trailing-twelve-month level. However, quarterly profit of $338.3m is well above average, and if it proves one-off the dividend base could narrow. The key factor for the payout remains the sustainability of profit rather than one-off items.
A yield of 10.6% is well above the risk-free rate, making the share attractive to income-oriented investors. Yet with EV/EBITDA above its historical average, the market already prices in a high level of dividends, and any decline in profit could trigger a re-rating.
EV/EBITDA LTM of 5.4 versus a three-year average of 4.4 – the share is 23% above its own history
EV/EBITDA for the trailing twelve months is 5.4 versus a three-year average of 4.4. That means the share trades 23% above its own history on this multiple. P/E LTM is 6.8, also indicating a low valuation of earnings, but relative to history the multiple is already above average.
The rise in the multiple is explained by profit and EBITDA growing faster than the share price. Yet the market has already priced in the strong quarter, and further multiple expansion requires confirmation that profit is sustainable. If profit returns to the levels of previous quarters, the multiple will look stretched.
Comparison with its own history shows the current valuation is not cheap. Further capitalisation growth requires either sustained profit growth or lower rates, and the facts provide no basis for either. The valuation therefore looks balanced, with no obvious cushion.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 4.23 bn USD |
| P/E (LTM) | 6.8 |
| EV/EBITDA (LTM) | 5.4 |
| P/B | 1.92 |
| Net debt / EBITDA (LTM) | 0.75 |
| Operating cash flow (LTM) | 0.71 bn |
| ROE | 56.1% |
| Dividend yield (12m) | 10.6% |
| EV/EBITDA, 3-year average | 4.4 |
Bottom line
TORM's Q2 2026 report is exceptionally strong: revenue rose 110.3%, EBITDA 220.6%, net profit 477.3%, and the EBITDA margin reached 63.0%. Yet the result looks one-off: quarterly profit is more than double the profit for the whole of the previous year. Leverage is low, a 10.6% dividend yield supports the share, but EV/EBITDA of 5.4 against a historical 4.4 shows the market has already priced in the strong results. The verdict is neutral: the share is fairly valued, but with no margin for error.
CMOC Group: $1.17bn quarterly profit, but net debt rose $7.9bn in three months
CMCLF →
CMOC Group's Q3 2026 results showed revenue of $10,679.2m, operating profit of $1,929.7m and net profit of $1,167.4m at a 10.9% net margin. Net debt stood at $6,956.9m on 30 September 2026 versus minus $0.9bn on 30 June – a $7.9bn increase in the quarter. At EV/EBITDA of 9.3 the stock trades above its own three-year average of 8.7, while the portal model implies +34% upside to fair value; with a 3.5% dividend yield and 1.54x LTM EBITDA leverage the share looks rather attractive, though the debt build warrants monitoring.
Key takeaways
— Revenue of $10,679.2m in the quarter with net profit of $1,167.4m – a 10.9% net margin
— Operating profit of $1,929.7m nearly matched EBITDA, so depreciation in the quarter was minor
— Net debt rose from minus $0.9bn on 30 June to $7.0bn on 30 September – up $7.9bn in three months
— Leverage at 1.54x LTM EBITDA is moderate, but net debt itself multiplied over the quarter
— EV/EBITDA of 9.3 is 7% above its own three-year average of 8.7 – the stock is pricier than its history
— Trailing 12-month dividend yield of 3.5% against a 28.2% return on equity
— The portal model puts the share's upside to fair value at +34%
Attractiveness
Key figures, USD bn
| Metric | — | Q3 2026 | Change |
|---|---|---|---|
| Revenue | — | 10.7 | — |
| Operating profit | — | 1.93 | — |
| Net profit | — | 1.17 | — |
| Net margin | — | 10.9% | — |
Revenue of $10,679.2m in the quarter with net profit of $1,167.4m – a 10.9% net margin
In Q3 2026 CMOC Group generated revenue of $10,679.2m and net profit of $1,167.4m. The net margin was 10.9% – a level at which the company remains profitable but shows no margin expansion.
Operating profit for the quarter was $1,929.7m, corresponding to roughly 18% of revenue. The gap between operating and net profit reflects tax and financial expenses, as well as possible one-off items not detailed in the provided data.
For comparison, over the trailing twelve months revenue was $28,800.0m and net profit $2,837.2m. The quarterly result equals about 37% of annual revenue and 41% of annual profit, pointing to even dynamics without a pronounced seasonal spike.
Operating profit of $1,929.7m nearly matched EBITDA, so depreciation in the quarter was minor
Operating profit and EBITDA for Q3 2026 were identical at $1,929.7m. This means depreciation charges in the quarter were close to zero or not broken out as a separate line in the reporting.
For a mining company this is atypical: depreciation of fixed assets usually accounts for a noticeable share of operating costs. The match may reflect accounting policy or reporting structure, but without additional data the cause cannot be established.
In practice this means EBITDA adds no information about cash flow beyond operating profit. When valuing the company through EV/EBITDA, the investor is effectively working with the same number as through EV/EBIT.
Net debt rose from minus $0.9bn on 30 June to $7.0bn on 30 September – up $7.9bn in three months
On 30 June 2026 the company's net debt was negative – minus $0.9bn, meaning cash exceeded debt obligations. By 30 September 2026 net debt stood at $6,956.9m, an increase of $7.9bn over the quarter.
Over a longer period, from 31 December 2025, net debt rose from minus $0.0bn to $7.0bn – a change of $7.0bn over roughly 12 months. Thus the shift from a net cash position to a debt position occurred during 2026.
The reason for this movement is not disclosed in the provided data. It could relate to funding capital expenditure, asset acquisitions or dividend payments, but without a cash flow statement nothing specific can be asserted. What matters is that the debt level is now material relative to profit.
Leverage at 1.54x LTM EBITDA is moderate, but net debt itself multiplied over the quarter
The ratio of net debt to trailing twelve-month EBITDA is 1.54x. This is a moderate level for a mining company: debt is covered by about one and a half annual EBITDA volumes, leaving a margin of safety if commodity prices fall.
However, net debt itself – $6,956.9m – rose by $7.9bn over the quarter, whereas in mid-year the company had a net cash position. The direction of change in the leverage ratio is not provided in the facts, so it cannot be stated that leverage rose or fell.
For the investor it matters that with LTM EBITDA of $4,521.2m debt servicing remains manageable. If quarterly profit of $1,167.4m is sustained, annual cash flow should allow gradual debt reduction without harming dividends.
EV/EBITDA of 9.3 is 7% above its own three-year average of 8.7 – the stock is pricier than its history
On the trailing twelve-month EV/EBITDA multiple the company trades at 9.3x. The three-year average for this multiple is 8.7x, meaning the current valuation is 7% above its own history.
This means the market values CMOC Group more expensively than on average over the past three years. At the same time P/E LTM is 14.8x and market capitalisation is $41,985.4m. For a company with a 28.2% return on equity, this P/E level does not look stretched.
The portal model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, implies upside to fair value of +34%. This is the portal's own estimate, not a market consensus.
Trailing 12-month dividend yield of 3.5% against a 28.2% return on equity
The trailing 12-month dividend yield is 3.5%. With market capitalisation of $41,985.4m this corresponds to payouts of roughly $1.5bn a year, although the exact amount is not disclosed in the provided data.
A return on equity of 28.2% indicates the company uses shareholder capital efficiently. The combination of such a return with a 3.5% dividend yield suggests part of profit is reinvested in growth and part returned to shareholders.
The 3.5% yield is comparable to current deposit rates but does not materially exceed them. For a dividend-oriented investor this is a moderate level that could be sensitive to a decline in profit or an increase in debt.
The portal model puts the share's upside to fair value at +34%
The portal's own model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, estimates upside to fair value of +34%. This means that at current commodity prices and the target multiple the stock trades below its calculated value.
The estimate relies on LTM EBITDA of $4,521.2m and market capitalisation of $41,985.4m. At the current EV/EBITDA of 9.3x and the target level embedded in the model, fair value comes out above the market price.
It should be noted that the model is sensitive to commodity prices: a decline would reduce EBITDA and, accordingly, fair value. The +34% upside is an estimate under current conditions, not a guaranteed outcome.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 42.0 bn USD |
| P/E (LTM) | 14.8 |
| EV/EBITDA (LTM) | 9.3 |
| P/B | 3.57 |
| Net debt / EBITDA (LTM) | 1.54 |
| ROE | 28.2% |
| Dividend yield (12m) | 3.5% |
| EV/EBITDA, 3-year average | 8.7 |
Bottom line
CMOC Group's quarterly results showed net profit of $1,167.4m at a 10.9% margin – the company remains profitable but without margin expansion. Its strengths remain a 28.2% return on equity and moderate leverage of 1.54x LTM EBITDA. However, net debt rose from minus $0.9bn to $7.0bn over the quarter, and EV/EBITDA of 9.3x is above its own three-year average of 8.7x. The portal model implies +34% upside, which, combined with a 3.5% dividend yield, outweighs the debt build risk. Verdict – rather attractive.
Aker BP: revenue accelerated to +49%, but the 110.3% EBITDA margin rests on one-offs
AKRBP →Aker BP reported third-quarter 2026 results: revenue of USD 3,872.0 mn (+49.0% YoY), EBITDA of USD 4,272.5 mn (+104.5%) and net profit of USD 986.4 mn (+245.5%). Growth accelerated from +42.0% in the second quarter, but EBITDA exceeded revenue and operating profit came in USD 495.0 mn below EBITDA – a sign of one-off items in the report rather than sustainable operating momentum. With EV/EBITDA at 2.6 versus its own three-year average of 2.1 and a –34% fair-value gap on the portal's model, the share looks rather unattractive at the current level.
Key takeaways
— Revenue grew 49.0% YoY, accelerating from 42.0% in the second quarter
— EBITDA of USD 4,272.5 mn exceeded revenue, while operating profit lagged it by USD 495.0 mn
— Net profit of USD 986.4 mn rose 3.5x, but the 25.5% net margin is half the EBITDA margin
— Leverage at 0.5x LTM EBITDA is low, but net debt itself rose from USD 5.3 bn to 6.1 bn over the year
— The 4.9% dividend yield rests on LTM profit of USD 2,119.9 mn
— EV/EBITDA of 2.6 is 22% above its own three-year average of 2.1
— The portal's model puts fair value 34% below the market
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 2.60 | 3.87 | +49.0% |
| EBITDA | 2.09 | 4.27 | +104.5% |
| Operating profit | 1.47 | 3.78 | +156.1% |
| Net profit | 0.29 | 0.99 | +245.5% |
| Operating cash flow | 2.02 | 2.43 | +20.3% |
| EBITDA margin | 80.4% | 110.3% | +29.9 pp |
| Net margin | 11.0% | 25.5% | +14.5 pp |
Revenue grew 49.0% YoY, accelerating from 42.0% in the second quarter
In the third quarter of 2026 Aker BP's revenue reached USD 3,872.0 mn, up 49.0% year on year. Growth was 42.0% in the second quarter, so the pace accelerated. This is the second consecutive quarter of double-digit growth after a 4.9% decline in the first quarter.
The acceleration rests on a low base: third-quarter 2025 revenue was USD 2,598.5 mn. The sequential rise from USD 3,597.5 mn in the second quarter of 2026 is also visible, but the year-on-year rate looks more impressive precisely because of the weak year-ago quarter.
The facts do not disclose whether volumes, prices or the exchange rate drove the increase. What is clear is that the company sold noticeably more than a year ago, and this is the best quarterly result in the available series.
EBITDA of USD 4,272.5 mn exceeded revenue, while operating profit lagged it by USD 495.0 mn
Third-quarter EBITDA was USD 4,272.5 mn – more than revenue of USD 3,872.0 mn. Such a ratio is only possible with large non-cash or one-off items above operating profit that the company adds back to EBITDA.
Operating profit was USD 3,777.5 mn, i.e. USD 495.0 mn below EBITDA. The gap between them is depreciation and, given the scale, one-off write-offs or revaluations that the facts do not break out.
The 110.3% EBITDA margin versus 80.4% a year earlier looks like an improvement, but with revenue below EBITDA it reflects the structure of the report rather than rising efficiency. Operating profit is the safer basis for judging sustainable profitability.
Net profit of USD 986.4 mn rose 3.5x, but the 25.5% net margin is half the EBITDA margin
Third-quarter net profit was USD 986.4 mn versus USD 285.5 mn a year earlier, up 245.5%. The net margin rose from 11.0% to 25.5%.
Between EBITDA of USD 4,272.5 mn and net profit of USD 986.4 mn sit depreciation, interest and taxes, which absorb about three-quarters of EBITDA. That is a normal structure for an oil and gas company with heavy depreciation, but it shows how far the bottom line is from the operating result.
LTM profit of USD 2,119.9 mn against a market capitalisation of USD 26,052.0 mn gives a P/E of 12.3. That is a moderate valuation, but it rests on profit in which third-quarter one-offs play a visible role.
Leverage at 0.5x LTM EBITDA is low, but net debt itself rose from USD 5.3 bn to 6.1 bn over the year
Net debt at 30 September 2026 was USD 6,136.7 mn, or USD 6.1 bn. Against LTM EBITDA of USD 12,367.6 mn that is 0.5x – low leverage for the sector.
Over the quarter net debt rose from USD 6.0 bn on 30 June to USD 6.1 bn on 30 September; over the year, from USD 5.3 bn on 30 September 2025 to USD 6.1 bn. The USD 0.8 bn increase, alongside quarterly operating cash flow of USD 2,432.8 mn, means investment and shareholder payouts exceeded cash generation.
The facts give the debt/EBITDA ratio only at its current level, so no direction of leverage can be inferred. A level of 0.5x does not by itself threaten the dividend, but the USD 0.8 bn rise in net debt over the year is worth watching.
The 4.9% dividend yield rests on LTM profit of USD 2,119.9 mn
The trailing twelve-month dividend yield is 4.9%. Payouts rest on LTM profit of USD 2,119.9 mn and LTM operating cash flow of USD 9,154.6 mn, which cover the dividend.
Our estimate for the 2026 dividend is based on LTM profit and the current yield: if payouts stay at last year's level, the yield will remain around 4.9%. The key condition is holding profit at the LTM level, and in the third quarter it leaned visibly on one-off items.
A 4.9% yield is lower than one might expect from an oil and gas company trading at 2.6x EV/EBITDA. If the third-quarter one-offs do not repeat, profit and hence the dividend base may be smaller, putting the payout under pressure.
EV/EBITDA of 2.6 is 22% above its own three-year average of 2.1
LTM EV/EBITDA is 2.6 against its own three-year average of 2.1. The share trades 22% above its three-year average – the most direct argument against buying at the current level.
The multiple is low in absolute terms, but for Aker BP it is above its usual range. The reason is that LTM EBITDA of USD 12,367.6 mn includes the third-quarter one-offs, which inflate the denominator and therefore understate the multiple. Without them EV/EBITDA would be higher.
A P/E of 12.3 and ROE of 33.1% look attractive, but ROE rests on the same profit with one-off items. Valuation on earnings and on EBITDA diverge, and that divergence is the main question for the share.
The portal's model puts fair value 34% below the market
On the portal's model, which re-prices EBITDA at current commodity prices at a target EV/EBITDA, fair value is 34% below the market. This is our own estimate, not a market consensus.
The gap arises because the market is paying for EBITDA inflated by third-quarter one-offs. Re-pricing EBITDA at current prices without those items would put the multiple above 2.6, and the discount to fair value would disappear.
The model's estimate is a directional indicator, not a verdict. It says that at current commodity prices the market is pricing in more than the cash flow delivers.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 26.1 bn USD |
| P/E (LTM) | 12.3 |
| EV/EBITDA (LTM) | 2.6 |
| P/B | 2.32 |
| Net debt / EBITDA (LTM) | 0.50 |
| Operating cash flow (LTM) | 9.15 bn |
| ROE | 33.1% |
| Dividend yield (12m) | 4.9% |
| EV/EBITDA, 3-year average | 2.1 |
Bottom line
The strong side of the report remains revenue: USD 3,872.0 mn and acceleration to +49.0% YoY. But EBITDA of USD 4,272.5 mn exceeded revenue, and operating profit lagged EBITDA by USD 495.0 mn – a visible part of the result is built on one-off items. Leverage at 0.5x LTM EBITDA is low, but net debt itself rose from USD 5.3 bn to 6.1 bn over the year. With EV/EBITDA at 2.6 versus a three-year average of 2.1 and the portal model at –34%, the share looks rather unattractive at the current level.
Athabasca Oil: revenue up 35.7%, but profit added only 9.6% as margin compressed
ATH →
On 25 November Athabasca Oil reported results for the third quarter of 2026. Revenue came in at USD 328.2 mn, up 35.7% year on year, operating profit at USD 154.7 mn, and net profit at USD 55.4 mn (+9.6% year on year). Revenue growth accelerated from the second quarter, when it fell 5.4%, but the net margin narrowed to 16.9% from 20.9% a year earlier. At an EV/EBITDA of 11.2 against its own three-year average of 5.4, the share looks more expensive than its history, so the verdict is neutral.
Key takeaways
— Revenue added 35.7% year on year, and growth accelerated after a 5.4% decline in the second quarter
— Operating profit rose to USD 154.7 mn, but net profit added only 9.6% as the margin narrowed to 16.9%
— Net debt remains negative at minus USD 62.7 mn at the end of September 2026
— Net debt to LTM EBITDA stands at minus 0.18 – there is no debt burden
— EV/EBITDA of 11.2 is more than double its own three-year average of 5.4 – the share is pricier than its history
— On the portal's model, the upside to fair value is estimated at +55%
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.24 | 0.33 | +35.7% |
| Operating profit | 0.11 | 0.15 | +40.4% |
| Net profit | 0.05 | 0.06 | +9.6% |
| Operating cash flow | 0.11 | 0.08 | -28.6% |
| Net margin | 20.9% | 16.9% | -4.0 pp |
Revenue added 35.7% year on year, and growth accelerated after a 5.4% decline in the second quarter
In the third quarter of 2026 Athabasca Oil's revenue reached USD 328.2 mn, up 35.7% from a year earlier. This is a marked acceleration: in the second quarter revenue fell 5.4% year on year, while in the first it grew 12.7%. Quarterly dynamics are uneven, but the latest report showed the strongest growth in the period under review.
Revenue is also above the previous quarter's USD 246.4 mn in Q2 2026. The quarter-on-quarter increase was about a third, which for an oil producer points to a combination of price and volume factors. The report does not break down grades and volumes in the data provided, so we limit ourselves to stating that the top line clearly accelerated.
Operating profit rose to USD 154.7 mn, but net profit added only 9.6% as the margin narrowed to 16.9%
Operating profit in Q3 2026 was USD 154.7 mn versus USD 110.2 mn a year earlier. That is growth of more than 40%, meaning operating leverage worked harder than revenue. Net profit, however, rose only to USD 55.4 mn, or 9.6% year on year.
The gap between operating and net profit is explained by the fact that a year earlier net profit was relatively high on a lower operating result. The net margin in the reporting quarter was 16.9% versus 20.9% a year earlier. Margin compression amid revenue growth means that part of the profit was absorbed by lines below operating profit – likely taxes or financial costs, but the data provided do not disclose the exact cause.
For an investor, the key point is that revenue growth does not translate into profit one for one. Operating efficiency improved, but the bottom line came in more modestly than the top-line dynamics would suggest.
Net debt remains negative at minus USD 62.7 mn at the end of September 2026
As of 30 September 2026 Athabasca Oil's net debt stood at minus USD 62.7 mn, meaning the company holds cash in excess of its debt obligations. A year earlier, on 30 June 2025, the figure was minus USD 0.1 bn, and over 12 months the change was plus USD 0.0 bn – the level remained essentially unchanged.
Negative net debt means the company has no net debt burden. This provides resilience to oil price swings and freedom in capital allocation. Operating cash flow for the quarter was USD 81.6 mn, which covers current needs and leaves a buffer.
Net debt to LTM EBITDA stands at minus 0.18 – there is no debt burden
The ratio of net debt to EBITDA over the last 12 months is minus 0.18. The negative value confirms that the cash cushion exceeds debt. There is no historical data for comparison, so we limit ourselves to stating the level: there is no burden.
LTM EBITDA was USD 356.6 mn on LTM revenue of USD 974.0 mn. LTM net profit was USD 175.2 mn, and LTM operating cash flow was USD 351.4 mn. These figures characterise the company as consistently generating cash flow with no debt burden.
EV/EBITDA of 11.2 is more than double its own three-year average of 5.4 – the share is pricier than its history
The LTM EV/EBITDA multiple is 11.2, while its own three-year average is 5.4. The current value is 108% above the average, meaning the share trades materially more expensive than it usually has over the past three years. This is the key argument against buying at the current level.
The LTM P/E is 23.3, which against LTM net profit of USD 175.2 mn and a market capitalisation of USD 4,087.6 mn looks moderate, but there is no historical average for P/E in the data. The main benchmark is EV/EBITDA, and it clearly points to overvaluation relative to its own history.
On the portal's model, the upside to fair value is estimated at +55%
On the portal's model, which re-prices EBITDA at current commodity prices at the target EV/EBITDA, the fair value of the share implies +55% upside to the current market price. This is our own estimate, not a market consensus and not a target price.
The model relies on current oil prices and the target multiple. If commodity prices stay at current levels and the company maintains operating efficiency, the upside could materialise. However, the current multiple of 11.2 already embeds an optimistic scenario, so the model's upside looks more like an indication of undervaluation relative to fair value than a near-term catalyst.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 4.09 bn USD |
| P/E (LTM) | 23.3 |
| EV/EBITDA (LTM) | 11.2 |
| P/B | 3.16 |
| Net debt / EBITDA (LTM) | -0.18 |
| Operating cash flow (LTM) | 0.35 bn |
| ROE | 14.4% |
| EV/EBITDA, 3-year average | 5.4 |
Bottom line
The strong side of the report was revenue growth of 35.7% and its acceleration after the second-quarter decline, along with operating profit of USD 154.7 mn. The weak spot is that net profit added only 9.6% and the margin narrowed to 16.9%. Net debt remains negative, providing financial resilience. The main question for a holder is valuation: EV/EBITDA of 11.2 against a three-year average of 5.4 means the share is pricier than its history, and the portal model's upside (+55%) does not offset this imbalance. The verdict is neutral: strong operating results are balanced by overvaluation relative to the company's own history.
Amerigo Resources: revenue up 61.2% while EBITDA jumped 154% on the same sales pace
ARG →On 25 November Amerigo Resources reported results for the third quarter of 2026. Revenue came in at $84.6 million (+61.2% year on year), EBITDA at $43.7 million (+154.0%) and net profit at $22.7 million (+240.3%). Top-line growth was roughly the same pace as in the second quarter (+61.1%), while the EBITDA margin rose to 51.7% from 32.8% a year earlier. At an EV/EBITDA of 6.0 against its own three-year average of 3.9 the share is more expensive than its history, so the verdict is neutral.
Key takeaways
— Revenue added 61.2% at a pace roughly unchanged from the second quarter
— EBITDA grew 154.0%, faster than revenue, lifting the margin to 51.7%
— Net profit rose 240.3%, with the net margin reaching 26.8%
— Operating cash flow of $32.6 million covers profit and needs almost no capital
— A 9.6% dividend yield rests on payouts funded by high profit
— EV/EBITDA of 6.0 against its own three-year average of 3.9 – the share is above its history
— The portal's model implies +15% upside to fair value
Attractiveness
Key figures, USD bn
| Metric | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | 0.05 | 0.08 | +61.2% |
| EBITDA | 0.02 | 0.04 | +154.0% |
| Operating profit | 0.01 | 0.04 | +226.7% |
| Net profit | 0.01 | 0.02 | +240.3% |
| Operating cash flow | 0.01 | 0.03 | +175.0% |
| EBITDA margin | 32.8% | 51.7% | +18.9 pp |
| Net margin | 12.7% | 26.8% | +14.1 pp |
Revenue added 61.2% at a pace roughly unchanged from the second quarter
In the third quarter of 2026 revenue reached $84.6 million, 61.2% more than a year earlier. Growth in the second quarter was 61.1%, so the pace was roughly the same: the company has held a high sales base for two quarters in a row.
The absolute level is below the second quarter ($120.3 million) but above the third quarter of 2025 ($52.5 million). Seasonality or one-offs are not disclosed in the figures, so we simply note that the quarter is weaker than the previous one but clearly stronger than a year ago.
Further growth will depend less on the comparison base than on copper prices and production volumes, which are not in the reported block. For now the revenue trend confirms that demand and prices remain high.
EBITDA grew 154.0%, faster than revenue, lifting the margin to 51.7%
EBITDA for the third quarter of 2026 was $43.7 million, 154.0% more than a year earlier. Growth faster than revenue means costs barely rose with sales.
The EBITDA margin rose to 51.7% from 32.8% a year earlier. That is a very high level for a mining company: more than half of revenue remains before depreciation and interest.
Operating profit was $37.6 million, so depreciation in the quarter was small. The main driver of the margin was copper prices rather than cost cuts – the reported block gives no breakdown of cost lines.
Net profit rose 240.3%, with the net margin reaching 26.8%
Net profit for the third quarter of 2026 was $22.7 million, 240.3% more than a year earlier. The net margin reached 26.8% from 12.7% a year earlier.
Profit growing faster than EBITDA reflects interest and taxes not rising proportionally. No one-off items are disclosed in the reported block, so the profit looks operational rather than the result of asset sales.
Over the last twelve months net profit was $73.6 million – the base on which the dividend rests.
Operating cash flow of $32.6 million covers profit and needs almost no capital
Operating cash flow for the third quarter of 2026 was $32.6 million, above net profit of $22.7 million. Profit is therefore backed by cash rather than a build-up of receivables.
Over the last twelve months operating cash flow was $119.4 million on revenue of $422.3 million. Capex is not disclosed in the reported block, but it was small in prior quarters: $5.7 million in the first quarter of 2026 and $4.7 million in the second.
Free cash flow therefore remains high, and it is the main source of shareholder payouts.
A 9.6% dividend yield rests on payouts funded by high profit
The trailing twelve-month dividend yield is 9.6%. That is a high yield, well above risk-free rates, and it explains investor interest in the stock.
Payouts rest on trailing twelve-month profit of $73.6 million and operating cash flow of $119.4 million. On that base the company can pay generously without adding debt.
Our estimate for the current year is payouts close to last year's level, provided copper prices stay high. The risk to the payout is a fall in metal prices: the quarter's profit is 240.3% above last year's largely on prices rather than volumes.
EV/EBITDA of 6.0 against its own three-year average of 3.9 – the share is above its history
The trailing twelve-month EV/EBITDA is 6.0, 56% above its own three-year average of 3.9. On this multiple the share is more expensive than its three-year history.
The trailing P/E is 12.3 – a moderate level for a company with a 26.8% net margin. The gap between a rich EV/EBITDA and a moderate P/E reflects high depreciation and low debt.
The portal's model, which reprices EBITDA at current commodity prices at the target EV/EBITDA, implies +15% upside to fair value. That is our own estimate, not a market consensus.
The portal's model implies +15% upside to fair value
On the portal's model fair value is 15% above the current market price. The calculation reprices EBITDA at current commodity prices at the target EV/EBITDA multiple.
The 15% upside is moderate: it does not offset the 56% premium to the company's own EV/EBITDA history. In other words, even with favourable prices the room for growth is limited.
The next report is needed to confirm the estimate: if EBITDA stays above $40 million a quarter, the model will look conservative. If copper prices fall, the upside disappears.
Valuation on the latest reported figures
| Metric | Value |
|---|---|
| Market cap | 0.91 bn USD |
| P/E (LTM) | 12.3 |
| EV/EBITDA (LTM) | 6.0 |
| P/B | 7.88 |
| Operating cash flow (LTM) | 0.12 bn |
| ROE | 62.9% |
| Dividend yield (12m) | 9.6% |
| EV/EBITDA, 3-year average | 3.9 |
Bottom line
The quarter was strong: revenue rose 61.2%, EBITDA 154.0%, the EBITDA margin reached 51.7%, and operating cash flow of $32.6 million covers profit. But profit growth of 240.3% rests on copper prices rather than volumes, which makes the result vulnerable to a commodity reversal. The 9.6% dividend yield is attractive, but payouts rest on the same high profit. An EV/EBITDA of 6.0 against its own three-year average of 3.9 shows the share is already above its history, and the portal model's upside is only +15%. The verdict is neutral: strong operating results are balanced by a rich valuation and dependence on copper prices.