On closer inspection of the fundamentals and outlook, we consider that there are a number of factors that could potentially underpin a recovery in Monadelphous. The catalyst for this recovery would be what upcoming AGM on 19 November.
The company's balance sheet is the strongest in Citi's coverage, courtesy of having negligible debt. The broker likes the combination of relative resilience in mining, coupled with optimism regarding the pace of recovery in energy from 2021.
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.