Following the recent underperformance of the share price, UBS upgrades to Buy from Neutral. The broker expects Monadelphous to return to sales growth in FY20 as it transitions into iron ore replacement and sustaining capital projects from LNG construction.
Updated analysis indicates that up to 87% of the broker’s FY20 sales forecasts may already be secured by long-term maintenance contracts or construction projects awarded through FY19 and FY20 to date. Target is reduced to $18.15 from $18.50.
Sector: Capital Goods.
Target price is $18.15.Current Price is $15.51. Difference: $2.64 – (brackets indicate current price is over target). If MND meets the UBS target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).