Austal Limited (AU:ASB)
ASX:ASB
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Austal
(Sydney:ASB)
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Rating:65Neutral
Price Target:
AU$5.50
▲(14.35% Upside)
Action:ReiteratedDate: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 order book and long-term program visibility
A $17.7bn backlog covering ~76 ships provides multi-year revenue and capacity visibility, reducing top-line volatility. Durable program flow supports stable workforce utilisation, supplier engagement and predictable cash conversion as build schedules progress across U.S. and Australasia markets.
Negative Factors
Onerous U.S. contracts compressing shipbuilding margins
A small number of onerous U.S. contracts are materially reducing shipbuilding margins, demonstrating program execution and pricing risk. In a sector with long program tails, such contracts can persistently depress segment profitability until cost recovery, renegotiation or program completion occurs.
Read all positive and negative factors
Positive Factors
Negative Factors
Record order book and long-term program visibility
A $17.7bn backlog covering ~76 ships provides multi-year revenue and capacity visibility, reducing top-line volatility. Durable program flow supports stable workforce utilisation, supplier engagement and predictable cash conversion as build schedules progress across U.S. and Australasia markets.
Read all positive factors
Austal (ASB) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$2.02B
Dividend YieldN/A
Average Volume (3M)1.37M
Price to Earnings (P/E)23.0
Beta (1Y)1.38
Revenue Growth24.13%
EPS Growth474.03%
CountryAU
Employees4,324
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.07
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$6.83Price Target Upside41.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.17
Revenue Forecast (FY)AU$2.15B
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 generates revenue primarily through the construction and sale of naval vessels, including patrol boats, frigates, and other military ships, as well as commercial ships such as ferries and offshore support vessels. The company secures contra...
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
4.81
Price Trends
5.89
Negative
6.37
Negative
6.64
Negative
Market Momentum
-0.28
Negative
41.49
Neutral
62.86
Neutral
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 4.81 is below the 20-day moving average (MA) of 4.93, below the 50-day MA of 5.89, and below the 200-day MA of 6.64, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 41.49 is Neutral, neither overbought nor oversold. The STOCH value of 62.86 is Neutral, 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$733.86M | ― | 8.35% | 4.17% | -21.57% | -34.09% | |
65 Neutral | AU$2.02B | 23.05 | 7.54% | ― | 24.13% | 474.03% | |
65 Neutral | AU$2.81B | 10.17 | 20.27% | 2.65% | 7.20% | 32.60% | |
64 Neutral | AU$5.11B | 14.22 | 7.97% | 3.11% | -4.53% | 97.67% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | AU$130.81M | 11.17 | 3.91% | 1.06% | 5.28% | 124.75% | |
56 Neutral | AU$119.63M | -6.43 | -12.62% | 2.78% | -0.72% | -78.03% |
* Industrials Sector Average
AU:ASB
Austal
4.81
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14.80%
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Austal Corporate Events
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...
Austal Wins $4 Billion Landing Craft Contract, Cementing Role as Australia’s Sovereign Shipbuilder
Feb 19, 2026
Austal Defence Australia has secured an approximately $4 billion contract from the Australian Government to build eight 100-metre Landing Craft Heavy vessels at its Henderson facilities in Western Australia, with construction starting in 2026 and ...
Austal Moves to Rectify ASX Governance Breach on Audit Committee Independence
Jan 9, 2026
Austal has disclosed that it was in breach of ASX Listing Rule 12.7 after its Audit Risk Committee was chaired by a director later deemed non‑independent, following the February 2025 resignation of former independent chair Sarah Adam‑...
State Street Group Ceases to Be Substantial Shareholder in Austal
Dec 30, 2025
State Street Corporation, through subsidiaries including State Street Global Advisors and State Street Bank and Trust Company, has lodged a notice stating it has ceased to be a substantial shareholder in Austal Limited as of 26 December 2025. The ...
Austal Wins A$135m Extension for Additional Evolved Cape-Class Patrol Boats
Dec 18, 2025
Austal has secured a contract extension worth more than A$135 million to build two additional Evolved Cape-class Patrol Boats for the Australian Border Force, lifting the total number of these vessels ordered to 14. The deal deepens Austal’s...
Austal Secures $1.029 Billion Australian Army Shipbuilding Contract
Dec 18, 2025
Austal Limited has secured a $1.029 billion contract to design and build 18 Landing Craft Medium (LCM) vessels for the Australian Army as part of the Strategic Shipbuilding Agreement with the Commonwealth of Australia. This contract marks the firs...
State Street Global Advisors Ceases Substantial Holding in Austal Limited
Dec 16, 2025
Austal Limited has announced that State Street Global Advisors Europe Limited has ceased to be a substantial holder in the company as of December 12, 2025. This change in substantial holding may impact Austal’s shareholder structure and coul...
Austal Gains Approval for Increased Hanwha Stake Amid Strong Financial Performance
Dec 12, 2025
Austal Limited has received approval from the Foreign Investment Review Board and the Federal Treasurer for Hanwha Corporation to increase its equity shareholding in Austal from 9.9% to 19.9%. This decision is subject to conditions regarding sensi...
State Street Corporation Ceases Substantial Holding in Austal Limited
Dec 11, 2025
Austal Limited has announced that State Street Corporation and its subsidiaries have ceased to be substantial holders in the company as of December 9, 2025. This change in substantial holding may impact Austal’s shareholder structure and cou...
State Street Corporation Ceases Substantial Holding in Austal Limited
Dec 5, 2025
Austal Limited has announced that State Street Corporation and its subsidiaries have ceased to be substantial holders of voting securities in the company as of December 3, 2025. This change in substantial holding may impact Austal’s sharehol...
Austal Limited Announces Change in Substantial Holding
Dec 1, 2025
Austal Limited has announced a change in substantial holding, as State Street Corporation and its subsidiaries have ceased to be substantial holders in the company as of November 27, 2025. This change in holding may impact Austal’s sharehold...
State Street Corporation Ceases Substantial Holding in Austal Limited
Nov 26, 2025
Austal Limited has announced that State Street Corporation and its subsidiaries have ceased to be substantial holders in the company as of November 24, 2025. This change in substantial holding may impact Austal’s shareholder composition and ...
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.