Austal Limited (AU:ASB)
ASX:ASB
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Austal
(Sydney:ASB)
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Rating:65Neutral
Price Target:
AU$4.00
â–Ľ(-13.61% Downside)
Action:Reiterated
Date:02/25/26
The score is supported mainly by solid financial performance (growth, improving profitability, low leverage, strong free-cash-flow growth) and a generally positive earnings outlook anchored by a record order book. The main offset is weak technical momentum (below key moving averages with negative MACD and low RSI), with additional caution from earnings-call execution/accounting risks and cash-flow/working-capital pressure.
Positive Factors
Record Backlog / Revenue Visibility
A $17.7bn order book covering ~76 ships provides multi-year revenue visibility and high capacity utilisation potential. For a defence-focused shipbuilder, this backlog de-risks near-term top-line volatility, underpins production planning and supports sustained workforce and supply‑chain investment.
Negative Factors
Onerous U.S. Contracts & Audit Qualification
A small number of onerous U.S. contracts are materially depressing shipbuilding margins and require complex judgement. The auditor qualification on specific program positions increases the risk of restatements or delayed revenue recognition and raises ongoing compliance and cost remediation obligations.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Backlog / Revenue Visibility
A $17.7bn order book covering ~76 ships provides multi-year revenue visibility and high capacity utilisation potential. For a defence-focused shipbuilder, this backlog de-risks near-term top-line volatility, underpins production planning and supports sustained workforce and supply‑chain investment.
Read all positive factors
Austal (ASB) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.58B
Dividend YieldN/A
Average Volume (3M)1.37M
Price to Earnings (P/E)23.0
Beta (1Y)1.37
Revenue Growth33.61%
EPS Growth209.56%
CountryAU
Employees4,324
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.24
Shares Outstanding422,050,230
10 Day Avg. Volume1,685,650
30 Day Avg. Volume1,370,479
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)1.82
Price to Sales (P/S)1.31
P/FCF Ratio11.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$6.92Price Target Upside49.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.17
Revenue Forecast (FY)AU$2.18B
Austal Business Overview & Revenue Model
Company Description
Austal Limited engages in the design, manufacture, and support of vessels for commercial and defense customers worldwide. It operates in four segments: USA Shipbuilding, USA Support, Australasia Shipbuilding, and Australasia Support. The company d...
How the Company Makes Money
Austal primarily makes money by (1) designing and building new vessels under contract and (2) providing lifecycle support services to keep vessels operating over time.
1) New vessel construction (project/contract revenue):
- Revenue is earned thr...
Austal Earnings Call Summary
Earnings Call Date:Feb 22, 2026
(Q2-2026)
| Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
The half-year call presented a broadly positive operational and strategic picture: record order book ($17.7bn), strong revenue growth (+34.4%), and material EBIT improvement (+41%) driven by significant uplift in Australasia and solid U.S. program contributions. These positives are tempered by a small number of onerous U.S. contracts causing margin pressure, an auditor qualification on specific program judgments, a prior forecasting error that required guidance revision, and working capital/cash flow headwinds (negative operating cash flow of $63m and trade receivables up 43%). Management highlights that major CapEx projects are on budget and on schedule, late milestone payments have been collected, and controls are being strengthened. On balance the business shows strong growth and long-term visibility despite discrete execution and program/accounting challenges that management is addressing.Positive Updates
Record Order Book and Program Visibility
Order book at a record $17.7 billion, representing ~76 ships under construction or scheduled and providing revenue/job visibility for about a decade. Recent contracts include Landing Craft Medium and Landing Craft Heavy totalling about $5 billion and 22 ships ordered this year (2 delivered).
Negative Updates
Onerous Contracts Driving Margin Compression
Two onerous contracts in the U.S. are compressing shipbuilding margins; the shipbuilding segment is profitable but reporting tight margins below management expectations.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Order Book and Program Visibility
Order book at a record $17.7 billion, representing ~76 ships under construction or scheduled and providing revenue/job visibility for about a decade. Recent contracts include Landing Craft Medium and Landing Craft Heavy totalling about $5 billion and 22 ships ordered this year (2 delivered).
Read all positive updates
Company Guidance
The call guided that Austal is entering a strong growth phase backed by a record $17.7bn order book (about 76 ships in build/scheduled) including ~$5bn of Landing Craft Medium/Heavy awards, 22 ships ordered (2 delivered) this year and >4,600 employees; management reported double‑digit growth across revenue, earnings and NPAT, group revenue +34.4%, EBIT $60.0m (earnings growth +41%) with Support EBIT margin 17.9% contributing $41.1m. Balance‑sheet and cash metrics: cash $371.6m at period end (cash down $212m in H1), net assets >$1.3bn, trade receivables $211m (+43%), operating cash flow -$63m, and $131m of H1 capital spend on MMF3/FA2 (combined capex program >$1bn); MMF3 Phase 1 is targeted to open in Q4 FY26. Segment/geography guidance: 96% defense weighting, U.S. shipbuilding revenue +29% (margin pressure from two onerous contracts and an auditor qualification on T‑ATS/AFDM judgements) while Australasia shipbuilding revenue +83% (EBIT >600%) and support +27% (earnings >400%), with group contribution approaching a 70:30 USA:Australasia split. Management expects shipbuilding margins to recover to the typical ~7–10% EBIT range as programs stabilise, confirmed the late ~$105m milestone receipts have now been collected, noted a prior guidance revision due to an internal forecasting error, and said it will not provide specific year‑end cash guidance.Austal Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
70
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.11B | 1.82B | 1.47B | 1.59B | 1.43B | 1.57B |
| Gross Profit | 279.02M | 229.60M | 172.51M | 99.10M | 230.28M | 222.56M |
| EBITDA | 202.31M | 199.76M | 127.64M | 56.76M | 153.96M | 160.69M |
| Net Income | 95.12M | 89.73M | 14.88M | -13.77M | 79.56M | 81.06M |
Balance Sheet | ||||||
| Total Assets | 3.01B | 2.95B | 2.09B | 1.93B | 1.69B | 1.45B |
| Cash, Cash Equivalents and Short-Term Investments | 371.57M | 583.93M | 173.51M | 179.20M | 240.11M | 346.90M |
| Total Debt | 407.28M | 266.99M | 281.06M | 240.46M | 234.12M | 204.60M |
| Total Liabilities | 1.68B | 1.64B | 1.09B | 885.12M | 675.97M | 615.78M |
| Stockholders Equity | 1.33B | 1.31B | 1.00B | 948.82M | 924.28M | 774.04M |
Cash Flow | ||||||
| Free Cash Flow | -194.18M | 210.68M | -82.96M | -41.91M | -127.42M | 30.18M |
| Operating Cash Flow | 105.11M | 406.32M | -13.05M | 86.71M | 37.50M | 107.33M |
| Investing Cash Flow | -282.81M | -149.23M | -12.70M | -102.78M | -127.51M | -85.05M |
| Financing Cash Flow | 190.50M | 153.76M | 19.52M | -38.06M | -38.33M | -46.31M |
Austal Technical Analysis
Negative
4.63
Price Trends
4.50
Negative
5.58
Negative
6.33
Negative
Market Momentum
-0.20
Positive
31.60
Neutral
6.69
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ASB, the sentiment is Negative. The current price of 4.63 is above the 20-day moving average (MA) of 4.17, above the 50-day MA of 4.50, and below the 200-day MA of 6.33, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 31.60 is Neutral, neither overbought nor oversold. The STOCH value of 6.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:ASB.
Austal Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | AU$840.88M | ― | 5.22% | 4.17% | -34.08% | -36.57% | |
65 Neutral | AU$1.58B | 23.05 | 7.21% | ― | 33.61% | 209.56% | |
65 Neutral | AU$2.90B | 10.17 | 20.27% | 2.65% | 26.80% | 40.18% | |
64 Neutral | AU$4.99B | 14.22 | 7.97% | 3.11% | -4.99% | 120.98% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | AU$123.12M | 11.17 | 3.91% | 1.06% | -21.62% | -33.88% | |
56 Neutral | AU$117.55M | -6.43 | -12.62% | 2.78% | -2.60% | -168.93% |
* Industrials Sector Average
AU:ASB
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Austal Corporate Events
Austal Lifts Value of New Patrol Boat Contract to A$150.3 Million After Correction
May 4, 2026
Austal Limited has corrected the value of a newly announced contract to build two additional Evolved Cape-class Patrol Boats for the Australian Border Force, revising the figure from approximately A$136 million to about A$150.3 million. The compan...
Austal Wins A$136m Contract for Additional Patrol Boats for Australian Border Force
May 4, 2026
Austal Limited has secured a A$136 million contract extension to build two additional Evolved Cape-class Patrol Boats for the Australian Border Force, raising the total number of these vessels ordered for the agency to six. The deal follows delive...
Austal defends half-year accounts, confirms U.S. defence relief in guidance
Mar 18, 2026
Austal has responded to an inquiry from the Australian Securities Exchange regarding its reviewed half-year financial report, confirming that its directors believe the accounts comply with accounting standards and give a true and fair view of the ...
Austal Posts Solid FY26 First-Half Results on Strong Order Book
Mar 17, 2026
Austal reported first-half FY2026 revenue of $1.1 billion and EBIT of $60.3 million, underscoring solid operational performance and scale in its global shipbuilding and sustainment activities. The company holds a sizeable $17.7 billion order book ...
Macquarie Group Ceases to Be Substantial Holder in Austal
Mar 11, 2026
Macquarie Group Limited and a wide network of its controlled entities have notified Austal that they have ceased to be substantial holders in the company. The filing, lodged under Australian corporations law and signed by Macquarie’s company...
Austal Director Richard Gibb Increases Indirect Shareholding
Mar 5, 2026
Austal Limited has disclosed a change in director Richard Gibb’s relevant interest in the company’s securities, following his indirect on‑market purchase of additional shares. Through Milkstone Holdings Pty Ltd, Gibb acquired 3,0...
Austal Director Susan Murphy Acquires Initial Shareholding via On-Market Purchase
Feb 27, 2026
Austal director Susan Murphy has increased her indirect equity stake in the shipbuilder through the Sue Wager Trust, acquiring 10,000 fully paid ordinary shares. The on-market purchase, completed on 25 February 2026 at an aggregate cost of $50,000...
Austal Director Increases Indirect Shareholding via On‑Market Purchase
Feb 26, 2026
Austal Limited disclosed a change in director Brent Cubis’s indirect interest in the company’s shares, filed under ASX listing rule 3.19A.2. The notice records Cubis’s holdings through Cubes Advisory Pty Ltd, where he is sole dir...
Austal Director Richard Gibb Acquires Initial Stake in Company Shares
Feb 26, 2026
Austal Limited has disclosed a change in director Richard Gibb’s interests, with an indirect acquisition of 5,000 fully paid ordinary shares via his directorship of Milkstone Holdings Pty Ltd. The on-market purchase, valued at $27,000, marks...
Austal Posts Strong FY26 Half-Year With $17.7 Billion Order Book
Feb 22, 2026
Austal reported first half FY26 revenue of $1.1 billion and EBIT of $60.3 million, underpinned by a robust order book of $17.7 billion including options. Operational activity remains high, with 22 ships ordered, two delivered, and 76 ships under c...
Austal Posts Strong H1 FY2026 and Secures Record $17.7bn Order Book
Feb 22, 2026
Austal reported a strong first half for FY2026, with revenue rising 34.4% to $1.1 billion and EBIT increasing 41.3% to $60.3 million, driven by a significant earnings turnaround in its Australasian operations that offset weaker U.S. performance am...
Austal wins A$4bn contract for eight Landing Craft Heavy vessels
Feb 22, 2026
Austal Limited, Australia’s largest defence exporter and a major global shipbuilder, specialises in advanced commercial and military vessels for clients including the U.S. Department of Defense, U.S. Coast Guard and the Australian Department...
Austal sets investor call to unveil FY2026 half-year results
Feb 20, 2026
Austal Limited will host an analyst and investor conference call on 23 February 2026 to discuss its financial results for the half year ended 31 December 2025. The company will release its half-year accounts and accompanying presentation to the ma...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.