Monadelphous Group (ASX: MND) shares surged to a record high of $36.88 after the contractor delivered a stronger-than-expected earnings result, before trimming gains to trade about 7.35% higher around 3pm to $32.87.
Managing Director Zoran Bebic said Monadelphous is currently forecasting FY26 full year revenue to be approximately 30 per cent higher than the prior period, with 1H26 operating margins maintained.
“Long-term demand in the resources and energy sectors is expected to continue, supported by an improved global economic growth outlook. Continued investment in new and existing operations in Western Australia’s iron ore sector is driving demand for both maintenance and construction services, with the energy sector to offer substantial prospects.
"The outlook for energy transition metals is strengthening, and Australia’s Net Zero emissions objective continues to drive long-term investment in energy generation, storage and transmission infrastructure. Leveraging its broad services capability, Monadelphous is well positioned to capitalise on the growing pipeline of opportunities.”
What do the analysts say?
RBC Capital Markets analyst Nicolas Daish reiterated an Outperform rating, pointing to a 15% beat versus consensusfor underlying EBITDA and an underlying EBITDA margin of 7.6%, ahead of the 7.1% expected. Daish also highlighted a “very strong” cashflow conversion rate of 172%.
Citi analyst William Park said Monadelphous was set for a double-digit share price move after what he described as “a ripper” interim result featuring a material earnings beat and a guidance upgrade.
“MND’s interim result demonstrated why it is considered to be a high-quality contractor with razor-sharp focus on risk, capacity and cost management,” Park said.
Citi said 3 factors stood out beyond the earnings beat:
- FY26 revenue growth outlook lifted: Monadelphous is now targeting 30% year-on-year revenue growth for FY26, which Citi said implies a 6% upgrade to expectations.
- Margin commentary signalled confidence: Park said management’s commentary around margin reinforced confidence in cost control and productivity. Assuming a 7.6% EBITDA margin on guided revenue, Citi estimates EBITDA of about $223–$224 million, which Park said would sit more than 15% above market expectations.
- No caution in the outlook: Citi said the absence of a cautious tone in the outlook commentary was notable given Monadelphous’ typically conservative stance.
“This is significant given MND is known for being very conservative,” Park said. “This implies that current momentum could flow through to FY27 underpinned by opportunities across the resources and energy sectors.”
Citi maintains a Buy rating and a $28.75 target price.