DOWNER EDI LIMITED (DOW)
Share Price Analysis and Chart

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21/08/2026

3

Neutral

$7.20

9.26%

On further inspection, UBS lowers the target to $7.20 from $8 and retains a Neutral rating. The analyst notes the shares fell -10% after the FY26 results, which is attributed to the higher-than-usual 2H earnings skew guidance, despite in-line FY27 guidance.

EPS forecasts are largely unchanged.

First Read: UBS notes Downer EDI's FY26 EBITA was in line with its forecast and consensus, as stronger margins offset weaker revenue.

Energy & Utilities outperformed expectations on energy transition activity and improved project execution, while Transport benefited from better execution and stabilisation in Australian Road Services, partly offset by weaker Facilities earnings.

FY27 guidance points to revenue, earnings and margin growth broadly consistent with forecasts, although the analyst highlights a larger than usual 2H weighting due to contract award timing and the ramp-up of secured work.

This implies mid-single-digit downgrades to 1H27 revenue and EBITA forecasts. The broker notes management remains confident in its FY30 ambitions for 4%-5% revenue CAGR and an EBITA margin approaching 6%.

Neutral. Target $8.

FORECAST
UBS forecasts a full year FY27 dividend of 32.00 cents and EPS of 46.00 cents.
UBS forecasts a full year FY28 dividend of 33.00 cents and EPS of 49.00 cents.

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24/08/2026

1

Buy

$8.20

24.43%

Canaccord Genuity maintains its Buy recommendation for Downer EDI with its target price decreased to $8.20 from $8.65 following a solid FY26 result defined by lower revenue, higher margins, and cash-backed earnings.

Group underlying revenue reached $9,873m, reflecting a foreign exchange translation drag from a weaker New Zealand dollar, while underlying EBITA grew 6.1% to $502.9m at an improved margin of 5.1%.

Underlying NPATA reached $306.7m, landing in the upper half of the guided range, supported by robust capital management including an ongoing share buyback program.

The broker's estimates incorporate downward revisions to revenue and earnings forecasts across FY27 and FY28 to account for a larger-than-normal second half skew and near-term contract ramp-up drags in Facilities and Water.

The analyst highlights that overall structural drivers remain intact and the business trades attractively on current valuation metrics.