Monadelphous Group Limited (ASX: MND) saw its shares climb following an upgrade from RBC Capital Markets, driven by a positive trading outlook and the company’s strong revenue guidance. The upgrade reflects growing confidence in Monadelphous’s ability to exceed expectations.
The market reacted positively to the news, with Monadelphous shares closing 3.08% higher today, adding to an already impressive year-to-date gain of 83.94%. This upward trajectory underscores the market’s confidence in the company’s performance and future prospects.
RBC Capital upgraded Monadelphous to “Outperform” from “Sector Perform,” significantly raising the price target from A$20.75 to A$26.75. This decision was influenced by Monadelphous’s projection of a 43% increase in first-half revenue for fiscal year 2026. RBC Capital believes this guidance is conservative, implying only a 0.7% year-over-year growth in the second half. They also noted the company’s price-to-earnings ratio of 23.3x as reasonable relative to historical data.
In early November, Monadelphous announced new contracts in the resources sector valued at approximately A$140 million, including a three-year extension with BHP in Western Australia and work at BHP’s Olympic Dam mine in South Australia. The company also reported robust operating conditions for the first four months of FY26, projecting first-half revenue of around A$1.5 billion and full-year revenue growth of 20-25% compared to the previous year.
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It’s worth noting that not all analysts share the same bullish sentiment. Jefferies downgraded Monadelphous to “Underperform” on July 8, 2025, citing concerns about the company’s ability to meet its fiscal year 2025 targets.
Despite these mixed ratings, Monadelphous reported strong full-year earnings on August 19, 2025, with a net profit after tax of A$83.7 million for FY25, a 34.6% increase year-over-year. The company secured approximately A$2.5 billion in new contracts and extensions during the period, and revenue for FY25 was A$2.27 billion, up 12% from the previous year.
The recent RBC Capital upgrade, coupled with strong contract wins, has boosted the positive outlook for Monadelphous. However, earlier downgrades suggest some caution remains.
