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1. Company Snapshot

1.a. Company Description

Finning International Inc.sells, services, and rents heavy equipment, and power and energy systems in Canada, Chile, the United Kingdom, Argentina, and internationally.The company offers telehandlers, articulated trucks, asphalt pavers, backhoe loaders, cable assist vehicles, cable yarding systems, chip dozers, cold planers, compactors, dozers, drills, electric rope shovels, excavators, material handlers, motor graders, off-highway trucks, pipelayers, remixing transfer vehicle, road reclaimers, road wideners, skid steer and compact track loaders, tack distributors, track loaders, underground-hard rock, wheel loaders, wheel tractor-scrapers, and windrow elevators, as well as attachments.


It is also involved in electric power generation, marine power systems, oil and gas, and industrials.In addition, the company provides aftercare, customer training, fuel solutions, fluid analysis, financing, rebuilds, rentals, repair services, maintenance options, warranty, and other services, as well as product support including sales of parts and servicing of equipment.It serves agriculture, construction, forestry, governmental, mining, paving, pipeline, power systems, and snow removal industries.


The company was formerly known as Finning Ltd.and changed its name to Finning International Inc.in April 1997.


Finning International Inc.was incorporated in 1933 and is headquartered in Surrey, Canada.

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1.b. Last Insights on FTT

Finning International's recent performance was driven by strong Q3 2025 results, with revenue increasing 14% year-over-year to $2.8 billion. A robust equipment backlog and emerging opportunities in Canada and Chile also contributed positively. The company's solid financials, highlighted by a significant revenue growth, likely bolstered investor confidence. Additionally, with 54% ownership by retail investors and 46% by institutions, the shareholder base is well-diversified. The company's exploration of new opportunities and a strong backlog position it for continued growth.

1.c. Company Highlights

2. Finning International's 2025 Earnings: A Strong Year with Record Backlog

Finning International Inc.'s 2025 was a strong year with revenues up 7% to $10.6 billion, driven by an 8% growth in product support revenue to almost $6 billion, primarily due to mining activity in Canada and South America. Adjusted earnings per share increased 14% in 2025, with an SG&A margin of 15%. The company generated nearly $550 million of free cash flow during the year. In Q4, revenue was $2.7 billion, up 6% from Q4 2024, with product support revenue up 8%. Adjusted EPS was $1, up 3% from Q4 2024, slightly below estimates of $1.04.

Publication Date: Feb -15

📋 Highlights
  • Revenue & Backlog Growth: 2025 revenue rose 7% to $10.6B, with a record $3.1B backlog (up 20% YoY).
  • Product Support Expansion: Driven by mining in Canada/South America, revenue reached nearly $6B (+8% YoY).
  • Profitability Improvement: Adjusted EPS rose 14% to $1 in 2025, with SG&A margin at 15% and $550M free cash flow generated.
  • Capital Efficiency: Net debt/EBITDA cut to 1.2x, and invested capital turns improved to 2.34x by Q4 2025.
  • Mining & Rental Momentum: Chile's copper mining growth (132 trucks delivered in 2 years) and $350M+ capex planned for 2026.

Financial Performance and Outlook

The company's financial performance was robust, with a record backlog of $3.1 billion, up 20% from the end of 2024. For 2026, Finning expects to continue growing product support revenues, driven by equipment population growth and transformational growth in power, energy, rental, and used equipment. The company expects its net capital and net rental fleet expenditures to be greater than $350 million.

Operational Highlights

Copper mining production in Chile is growing, with 132 new trucks delivered over the last two years, and 16 more in backlog for this year. The company is positioning itself to take advantage of the growing mining opportunity in Argentina. In Canada, rental revenues were up 9% last year, and utilization is healthy, with optimism for this year. Product support growth in Canada is driven by the mining sector.

Valuation and Return on Investment

With a P/E Ratio of 17.3 and an EV/EBITDA of 11.36, the market is pricing in a certain level of growth. Finning's ROIC is 11.35%, indicating a strong return on invested capital. The company's Net Debt to EBITDA ratio improved to 1.2x, indicating a healthy balance sheet. Analysts estimate next year's revenue growth at 4.6%, which may not be fully reflected in the current valuation.

Growth Drivers and Investment Opportunities

The company is committed to growing its labor force, particularly in Canada, and has seen encouragement in construction product support, especially in Chile. Finning is balancing its positioning in Argentina to take advantage of the growing mining opportunity while being mindful of the volatile backdrop. The rental business is experiencing a secular trend, and the company is committed to growing and investing behind it.

3. NewsRoom

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CIBC Details the Companies It Expects May Benefit From Canada's New Defence Industrial Strategy

Feb -18

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Assessing Finning International (TSX:FTT) Valuation After Recent Share Price Momentum

Feb -14

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CIBC Maintains It Outperformer Rating on Finning International After Q4 Results; Price Target Raised to C$103.00

Feb -12

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Finning International Q4 Earnings Call Highlights

Feb -12

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Finning International Inc (FINGF) Q4 2025 Earnings Call Highlights: Record Revenue Growth and ...

Feb -11

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Finning reports Q4 and Annual 2025 results

Feb -10

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Finning International Inc.'s (TSE:FTT) Stock's On An Uptrend: Are Strong Financials Guiding The Market?

Dec -20

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Finning International Inc (FINGF) Q3 2025 Earnings Call Highlights: Strong Revenue Growth and ...

Nov -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Product Support

Expected Growth: 4.83%

Finning International Inc.'s 4.83% growth in Product Support is driven by increasing demand for heavy equipment maintenance and repair services, expansion into new markets, and strategic partnerships. Additionally, investments in digital technologies and training programs have enhanced customer experience, leading to increased loyalty and retention.

New Equipment

Expected Growth: 4.83%

Finning International Inc.'s new equipment segment growth of 4.83% is driven by increasing demand from mining and construction industries, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and technology have improved operational efficiency, leading to higher sales and revenue growth.

Fuel and Other

Expected Growth: 4.65%

Finning International Inc.'s Fuel and Other segment growth of 4.65% is driven by increasing demand for heavy equipment and machinery in the mining and construction industries, coupled with rising commodity prices and government investments in infrastructure projects, leading to higher sales of fuel and other related products.

Used Equipment

Expected Growth: 4.65%

Finning International Inc.'s used equipment segment growth of 4.65% is driven by increasing demand from cost-conscious customers, expansion into new markets, and strategic partnerships. Additionally, the company's strong brand reputation, efficient logistics, and competitive pricing contribute to its growth. Furthermore, the rising need for refurbished equipment in the mining and construction industries also supports this growth.

Equipment Rental

Expected Growth: 4.65%

Finning International Inc.'s equipment rental segment growth of 4.65% is driven by increasing demand from mining and construction industries, expansion into new markets, and strategic partnerships. Additionally, the company's focus on fleet modernization, technology adoption, and cost optimization have improved operational efficiency, contributing to the growth.

7. Detailed Products

Caterpillar Heavy Equipment

Finning International Inc. is the largest dealer of Caterpillar heavy equipment, providing a wide range of machines and engines for construction, mining, and other industries.

Power Systems

Finning provides Caterpillar power systems, including generators, engines, and switchgear, for industrial, commercial, and residential applications.

Product Support

Finning offers a range of product support services, including maintenance, repair, and overhaul of Caterpillar equipment and engines.

Rental Equipment

Finning provides a rental fleet of Caterpillar equipment, including excavators, loaders, and generators, for short-term or long-term rentals.

Used Equipment

Finning sells used Caterpillar equipment, including excavators, dozers, and loaders, that have been inspected and certified.

Parts and Service

Finning provides genuine Caterpillar parts and service support, including maintenance, repair, and overhaul of equipment and engines.

8. Finning International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Finning International Inc. operates in a niche market with limited substitutes, but customers may still opt for alternative solutions, such as renting or leasing equipment.

Bargaining Power Of Customers

Finning International Inc.'s customers are largely dependent on the company's products and services, giving them limited bargaining power.

Bargaining Power Of Suppliers

Finning International Inc. relies on a few large suppliers, giving them some bargaining power, but the company's size and scale also provide it with negotiating power.

Threat Of New Entrants

The heavy equipment industry has high barriers to entry, making it difficult for new entrants to compete with established players like Finning International Inc.

Intensity Of Rivalry

The heavy equipment industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.75%
Debt Cost 8.05%
Equity Weight 48.25%
Equity Cost 12.08%
WACC 9.99%
Leverage 107.24%

11. Quality Control: Finning International Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Finning

A-Score: 6.6/10

Value: 4.9

Growth: 7.6

Quality: 5.3

Yield: 5.0

Momentum: 10.0

Volatility: 6.7

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Toromont

A-Score: 6.0/10

Value: 2.6

Growth: 6.4

Quality: 6.3

Yield: 2.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Applied Industrial Technologies

A-Score: 5.3/10

Value: 3.1

Growth: 7.1

Quality: 7.2

Yield: 2.0

Momentum: 4.5

Volatility: 8.0

1-Year Total Return ->

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Watsco

A-Score: 5.2/10

Value: 3.1

Growth: 6.8

Quality: 7.1

Yield: 6.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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Pool

A-Score: 4.7/10

Value: 3.6

Growth: 6.8

Quality: 6.1

Yield: 3.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Core & Main

A-Score: 4.6/10

Value: 3.6

Growth: 8.4

Quality: 5.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

91.31$

Current Price

91.31$

Potential

-0.00%

Expected Cash-Flows