Bell Potter has a positive take on Monadelphous due to the announcement of contract awards worth circa $350m, putting it on track to achieve its $1.5bn target in awards for FY20.
The broker expects growth to continue on account of an increase in iron ore development activity along with maintenance demand due to a rise in production.
The Mondium JV contract worth some $400m will also provide prospects of growth and expansion, suggests the broker.
Operating margins are expected to improve to 7.5-7.6% by FY21/FY22. Bell Potter rates this stock a Buy with a target price of $20.30.
This report was published on January 14, 2020.
Sector: Capital Goods.
Target price is $20.30.Current Price is $17.35. Difference: $2.95 – (brackets indicate current price is over target). If MND meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
