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$4.00
▼(-4.08% Downside)
Action:ReiteratedDate: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 margins & cash conversion
Deterra’s royalty model yields exceptionally high accounting margins and near-complete conversion of profits to free cash flow. That durable cash generation supports a predictable dividend policy, funds opportunistic acquisitions, and reduces reliance on operating capex, strengthening long-term financial resilience.
Negative Factors
Revenue concentration on MAC royalty
A large share of earnings is tied to a single operator’s iron-ore output and prices. That structural concentration leaves cashflows exposed to BHP operational decisions, Pilbara production variability and iron ore price cycles, limiting revenue diversification and raising sustained volatility risk.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins & cash conversion
Deterra’s royalty model yields exceptionally high accounting margins and near-complete conversion of profits to free cash flow. That durable cash generation supports a predictable dividend policy, funds opportunistic acquisitions, and reduces reliance on operating capex, strengthening long-term financial resilience.
Read all positive factors
Deterra Royalties Ltd (DRR) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$2.21B
Dividend Yield5.18%
Average Volume (3M)1.54M
Price to Earnings (P/E)6.2
Beta (1Y)1.24
Revenue Growth6.54%
EPS Growth0.48%
CountryAU
Employees11
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.16
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$4.57Price Target Upside9.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.29
Revenue Forecast (FY)AU$235.83M
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 collecting royalties tied to mineral production and sales from mines operated by third parties on tenements over which DRR holds royalty rights. Its main revenue stream has been royalties from iron ore production from ...
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
4.09
Positive
4.06
Positive
4.00
Positive
Market Momentum
<0.01
Negative
57.70
Neutral
79.01
Neutral
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 above the 20-day moving average (MA) of 3.95, above the 50-day MA of 4.09, and above the 200-day MA of 4.00, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 79.01 is Neutral, 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$2.21B | 6.18 | 135.85% | 5.18% | 6.54% | 0.48% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | AU$691.18M | -19.26 | -6.81% | ― | ― | -164.37% | |
49 Neutral | AU$3.11B | -8.61 | -12.75% | 1.04% | -4.84% | -30.61% | |
47 Neutral | AU$4.19B | -61.30 | -2.79% | 5.03% | -2.30% | -234.27% | |
45 Neutral | AU$6.26B | -45.43 | -9.95% | ― | -37.23% | -32433.33% |
* Basic Materials Sector Average
AU:DRR
Deterra Royalties Ltd
4.26
0.93
28.00%
AU:BOE
Boss Energy
1.64
-0.99
-37.60%
AU:ILU
Iluka Resources Limited
7.44
4.05
119.27%
AU:IGO
IGO
8.14
4.62
131.25%
AU:NIC
Nickel Mines Ltd.
0.97
0.49
102.08%
Deterra Royalties Ltd Corporate Events
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 ...
Deterra Royalties Lifts Iron Ore Income on Record MAC Volumes, Advances Lithium Royalty Exposure
Jan 30, 2026
Deterra reported portfolio revenue of A$62.9 million for the December 2025 quarter, driven by a 15% quarter-on-quarter rise in MAC iron ore royalties to A$62 million on the back of record sales volumes and stronger realised prices, while other pro...
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.