Deterra Royalties Ltd (AU:DRR)
ASX:DRR
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Deterra Royalties Ltd
(Sydney:DRR)
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Rating:73Outperform
Price Target:
AU$5.00
▲(19.90% Upside)
Action:Reiterated
Date:02/18/26
The score is driven primarily by strong financial profitability/cash generation and a constructive earnings-call outlook (record NPAT, solid revenue growth, and strong liquidity). Valuation is supportive due to the attractive dividend yield and reasonable P/E. These positives are moderated by weak technical momentum indicators and leverage risk flagged in the balance sheet analysis.
Positive Factors
High profitability & cash conversion
Deterra’s royalty model yields extremely high margins and converts nearly all accounting profits into cash. Persistent high gross/net margins and ~99% FCF-to-net-income support durable dividend capacity, capital return and optional reinvestment without mine operating risk.
Negative Factors
High leverage on balance sheet
A debt-to-equity ratio above 2x indicates meaningful leverage for a royalty company; while yields and ROE are strong, elevated leverage reduces resilience to production shocks or price downturns and constrains capacity to fund large opportunistic acquisitions without refinancing.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability & cash conversion
Deterra’s royalty model yields extremely high margins and converts nearly all accounting profits into cash. Persistent high gross/net margins and ~99% FCF-to-net-income support durable dividend capacity, capital return and optional reinvestment without mine operating risk.
Read all positive factors
Deterra Royalties Ltd (DRR) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$2.40B
Dividend Yield5.18%
Average Volume (3M)1.54M
Price to Earnings (P/E)6.2
Beta (1Y)1.27
Revenue Growth20.22%
EPS Growth27.66%
CountryAU
Employees11
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.33
Shares Outstanding529,456,500
10 Day Avg. Volume891,907
30 Day Avg. Volume1,536,395
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)15.95
Price to Sales (P/S)7.55
P/FCF Ratio14.96
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$4.75Price Target Upside13.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.29
Revenue Forecast (FY)AU$240.95M
Deterra Royalties Ltd Business Overview & Revenue Model
Company Description
Deterra Royalties Limited operates as a royalty investment company in Australia. It is also involved in the management and growth of a portfolio of royalty assets across bulk commodities, base, and battery metals. The company holds interest in a p...
How the Company Makes Money
DRR makes money primarily by receiving royalty revenue from mining production covered by its royalty interests. Under these arrangements, an operating miner develops and runs the mine, sells the commodity, and then pays DRR a contractually defined...
Deterra Royalties Ltd Earnings Call Summary
Earnings Call Date:Feb 16, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and financial half driven by record NPAT, 12% revenue growth, record MAC volumes, successful noncore asset disposals and meaningful de-risking and value appreciation at Thacker Pass. These positives are tempered by management transition risk, limited share price appreciation to date, and the fact that retained cash has not yet been redeployed into material new acquisitions. Overall the financial and project fundamentals are robust, with clear liquidity and borrowing advantages enabling selective growth options.Positive Updates
Record Profit After Tax (NPAT)
Delivered a record first half NPAT of $87 million, supporting a fully franked interim dividend of $0.124 per share.
Negative Updates
Share Price and Capital Gains Underperformance
Management acknowledged that despite delivering dividends, the company has not delivered capital gains — the share price is not materially different from the 2020 IPO price, suggesting limited shareholder capital appreciation to date.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Profit After Tax (NPAT)
Delivered a record first half NPAT of $87 million, supporting a fully franked interim dividend of $0.124 per share.
Read all positive updates
Company Guidance
Management reiterated a clear capital and operating framework: a 75% payout ratio (interim dividend $0.124/share fully franked), a target leverage range of 0–15% and no return to 100% MAC payout, while keeping a strong balance sheet (net debt $149m; drawn debt AUD 156m; AUD 344m undrawn capacity; average facility margin 1.3%; after‑tax borrowing rate 3.6%; well within covenants). They flagged robust H1 metrics—NPAT $87m, revenue +12% driven by MAC’s record sales of 68 million dry tonnes at a realized AUD 139/tonne (up 5% y/y), operating costs $8.1m (including $1m one‑off CEO transition), accounting profit on noncore sales $8.4m and cash proceeds $108m with a further $13m receivable in Aug‑2026—and confirmed readiness to deploy capital opportunistically into ~$100–$500m opportunities rather than hoard cash. On Thacker Pass they noted material derisking: a US$2.2bn DOE loan (23 years at U.S. T‑bill rates), US government 5% share/5% JV interest, GM’s US$945m contribution, lithium carbonate indices rising from ~US$11,000/t to ~US$17,500/t, Lithium Americas’ share price more than doubling, an updated 85‑year mine life and 160,000 tpa expansion, and first production targeted end‑2027.Deterra Royalties Ltd Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
70
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 272.48M | 263.43M | 240.51M | 229.26M | 265.15M | 145.21M |
| Gross Profit | 261.23M | 263.43M | 231.43M | 220.34M | 257.12M | 140.24M |
| EBITDA | 256.48M | 248.03M | 225.56M | 219.34M | 256.78M | 140.37M |
| Net Income | 178.95M | 155.69M | 154.89M | 152.46M | 178.46M | 94.26M |
Balance Sheet | ||||||
| Total Assets | 375.00M | 502.37M | 101.29M | 115.19M | 153.49M | 89.09M |
| Cash, Cash Equivalents and Short-Term Investments | 7.17M | 24.39M | 31.06M | 29.49M | 27.46M | 24.21M |
| Total Debt | 156.57M | 295.40M | 497.00K | 186.00K | 248.00K | 311.00K |
| Total Liabilities | 236.22M | 377.71M | 20.94M | 23.05M | 34.87M | 27.37M |
| Stockholders Equity | 138.79M | 124.66M | 80.35M | 92.14M | 118.63M | 61.72M |
Cash Flow | ||||||
| Free Cash Flow | 173.09M | 132.95M | 170.09M | 182.23M | 127.81M | 82.12M |
| Operating Cash Flow | 173.10M | 134.88M | 170.18M | 182.32M | 127.81M | 82.17M |
| Investing Cash Flow | 102.82M | -267.73M | -88.00K | -89.00K | -10.00K | -24.45M |
| Financing Cash Flow | -273.34M | 126.30M | -168.52M | -180.20M | -124.56M | -33.51M |
Deterra Royalties Ltd Technical Analysis
Positive
4.17
Price Trends
4.17
Positive
4.18
Positive
4.08
Positive
Market Momentum
0.11
Negative
75.83
Negative
84.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DRR, the sentiment is Positive. The current price of 4.17 is below the 20-day moving average (MA) of 4.37, above the 50-day MA of 4.17, and above the 200-day MA of 4.08, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 75.83 is Negative, neither overbought nor oversold. The STOCH value of 84.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:DRR.
Deterra Royalties Ltd Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | AU$2.40B | 6.18 | 135.85% | 5.18% | 20.22% | 27.66% | |
63 Neutral | AU$523.12M | -19.26 | -6.81% | ― | 129.36% | -43.38% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
56 Neutral | AU$3.46B | -1.63 | -12.75% | 1.04% | -13.24% | -223.96% | |
49 Neutral | AU$6.96B | -45.43 | -9.95% | ― | -36.60% | 80.62% | |
47 Neutral | AU$4.39B | -61.30 | -2.79% | 5.03% | -3.26% | 66.55% |
* Basic Materials Sector Average
AU:DRR
Deterra Royalties Ltd
4.68
1.14
32.39%
AU:BOE
Boss Energy
1.28
-2.93
-69.64%
AU:ILU
Iluka Resources Limited
7.97
4.14
108.15%
AU:IGO
IGO
9.47
5.24
123.88%
AU:NIC
Nickel Mines Ltd.
1.03
0.35
52.99%
Deterra Royalties Ltd Corporate Events
Deterra Royalties Posts Solid Quarter as MAC Cash Flows Offset Iron Ore Price Dip
Apr 30, 2026
Deterra Royalties reported March quarter portfolio revenue of A$57.3 million, driven largely by A$56.6 million in iron ore royalties from Mining Area C, which fell 9% from the prior quarter due to lower realised prices despite record production. O...
State Street Group Ceases to Be Substantial Holder in Deterra Royalties
Apr 16, 2026
State Street Corporation and several of its asset management subsidiaries, including State Street Global Advisors entities in Australia, Europe and North America, have lodged a notice that they have ceased to be substantial holders in Deterra Roya...
Aware Super Ceases to Be Substantial Holder in Deterra Royalties
Apr 15, 2026
Aware Super Pty Ltd, as trustee of Aware Super, has notified Deterra Royalties Ltd that it has ceased to be a substantial holder in the company as of 10 April 2026. The change was disclosed via a statutory Form 605 notice under Australia’s C...
Deterra Director Increases Shareholding via Dividend Reinvestment Plan
Mar 25, 2026
Deterra Royalties Limited has disclosed a change in the interests of director Jennifer Seabrook, reflecting additional ordinary fully paid shares acquired through participation in the company’s Dividend Reinvestment Plan. Following the reinv...
Deterra Royalties Seeks ASX Quotation for New Employee Incentive Shares
Mar 25, 2026
Deterra Royalties Limited has applied for the quotation of 182,992 new ordinary fully paid shares on the ASX, issued on 24 March 2026 under an employee incentive scheme. The move modestly increases the company’s listed capital base and refle...
Deterra Royalties Lists New Shares From Dividend Plan on ASX
Mar 25, 2026
Deterra Royalties Ltd has applied for quotation on the ASX of 141,924 new ordinary fully paid shares, issued on March 24, 2026 under a dividend or distribution plan. The modest share issuance reflects the company’s ongoing use of equity-base...
Deterra Royalties Updates Dividend Reinvestment Plan Pricing for December Half-Year
Mar 6, 2026
Deterra Royalties Limited has updated its notification to the ASX regarding a dividend for the six-month period ended 31 December 2025, payable on its ordinary fully paid shares. The latest announcement revises the earlier 17 February 2026 notice ...
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.