AUSTAL LIMITED (ASB)
Share Price Analysis and Chart

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06/08/2025

3

Neutral

$7.00

3.70%

Citi sees the finalisation of Austal's Strategic Shipbuilding Agreement with the Commonwealth as a positive development, given delays experienced so far.

But the report highlights the the bigger positive was EBIT guidance upgrade to "not less than $100m" from "not less than $80m".

The broker estimates 25% of the upgrade was due to accounting benefit from the US$450m General Dynamics Electric Boat contract and the remaining from improved operational performance.

The broker factored $7m benefit in FY26 from the contract and expects to revise it further and beyond FY26 once the company provides more details.

Neutral. Target lifted to $7.00 from $6.10 on a 27% lift in FY25 net profit forecast, 8% in FY26 and 2% in FY27, along with an increase in multiples used in valuation modeling.

FORECAST
Citi forecasts a full year FY25 dividend of 0.00 cents and EPS of 17.80 cents.
Citi forecasts a full year FY26 dividend of 0.00 cents and EPS of 20.80 cents.

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06/08/2025

3

Hold

$6.67

-1.19%

Petra Capital maintains its Hold rating on Austal, observing the current share price already reflects favourable industry conditions, and strong competitive positioning. There has also been takeover speculation, and upside potential from the pending T-ATS REA review.

Management has finalised a 15-year Strategic Shipbuilding Agreement (SSA) with the Australian Government, which confirms Austal as the prime contractor for the LC-H and LC-M landing craft programs.

These programs are expected to deliver approximately $3bn in contract value, with Austal’s share estimated at $2.2bn for LC-H and $0.8bn for LC-M, explains the broker.

A government call option is attached to the SSA (exercisable if there is a change of control at Austal), potentially complicating future M&A interest, highlights the analyst.

Separately, Petra notes Austal has lifted FY25 earnings (EBIT) guidance to at least $100m, up from $80m, due to a US Navy incentive payment.

Target $6.67.

FORECAST
Petra Capital forecasts a full year FY25 dividend of 6.00 cents and EPS of 13.50 cents.
Petra Capital forecasts a full year FY26 dividend of 13.00 cents and EPS of 13.10 cents.