Austal Limited (AU:ASB)
ASX:ASB
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Austal
(Sydney:ASB)
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Rating:65Neutral
Price Target:
AU$4.50
▼(-2.81% 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 order book
A $17.7bn backlog covering ~76 ships provides multi-year revenue visibility and production load, underpinning sustained top-line growth and predictable cash flow. This durability supports capacity planning, workforce retention, and phased revenue recognition across the build cycle.
Negative Factors
Onerous U.S. contracts compressing margins
A small number of loss-making U.S. programs materially depress shipbuilding margins and can force provisions or margin dilution across the segment. Persistent underperforming contracts heighten execution risk and reduce the earnings quality of new awards until fully remedied.
Read all positive and negative factors
Positive Factors
Negative Factors
Record order book
A $17.7bn backlog covering ~76 ships provides multi-year revenue visibility and production load, underpinning sustained top-line growth and predictable cash flow. This durability supports capacity planning, workforce retention, and phased revenue recognition across the build cycle.
Read all positive factors
Austal (ASB) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$1.88B
Dividend YieldN/A
Average Volume (3M)1.37M
Price to Earnings (P/E)19.6
Beta (1Y)1.39
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 TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.16
Revenue Forecast (FY)AU$2.13B
Austal Business Overview & Revenue Model
Company Description
Globally, Austal Limited specializes in the design, construction, and ongoing maintenance of diverse maritime vessels for both commercial entities and national defense forces. Its operations are strategically segmented into four key divisions: USA...
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
Neutral
4.63
Price Trends
4.21
Positive
4.84
Negative
6.04
Negative
Market Momentum
0.05
Negative
61.84
Neutral
83.94
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ASB, the sentiment is Neutral. The current price of 4.63 is above the 20-day moving average (MA) of 4.04, above the 50-day MA of 4.21, and below the 200-day MA of 6.04, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 61.84 is Neutral, neither overbought nor oversold. The STOCH value of 83.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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$1.02B | 33.62 | 5.61% | 4.17% | -34.08% | -36.57% | |
65 Neutral | AU$1.88B | 19.57 | 7.21% | ― | 33.61% | 209.56% | |
65 Neutral | AU$2.93B | 27.33 | 20.27% | 2.65% | 26.80% | 40.18% | |
64 Neutral | AU$5.42B | 34.14 | 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$107.23M | 11.05 | 3.91% | 1.06% | -21.62% | -33.88% | |
60 Neutral | AU$152.13M | -20.41 | -12.62% | 2.78% | -2.60% | -168.93% |
* Industrials Sector Average
AU:ASB
Austal
4.47
-1.75
-28.14%
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AU:CVL
Civmec Singapore Limited Shs Chess Deposit Interests Repr 1 Sh
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0.96
93.50%
Austal Corporate Events
Austal Names Gene Miller President of Austal USA to Drive $17bn Order Book
May 27, 2026
Austal has appointed Eugene (Gene) Miller as President of Austal USA, following his tenure as Interim President since February 2026 and earlier roles as Vice President of Operations and Chief Operating Officer. He now leads more than 3,000 shipbui...
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 ...
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.