Worley shares (ASX: WOR) bounced back above the A$10 level on Monday after the company announced it had been awarded contracts by BHP for major expansion projects at Olympic Dam and Carrapateena in South Australia. The win offers a timely reprieve for a stock that has lost nearly a fifth of its value this year, though both projects remain subject to final investment decisions by the mining giant.
The Worley share price rounded out Monday’s session at A$10.07, up 2.76%, snapping a run of three consecutive closes below the psychologically important A$10 level. The rebound follows a difficult stretch for the stock, which had fallen 7.95% over the past month and remains down 19.76% year-to-date.
What Happened?
Under the agreements, Worley will provide study and engineering, procurement and construction management (EPCM) services for two of BHP’s key South Australian copper growth projects. At Olympic Dam, the work covers a potential block cave development and associated infrastructure, while at Carrapateena it relates to a potential expansion of underground mining operations and processing facilities. Both form part of BHP’s long-term Copper South Australia growth strategy.
Worley said services will be delivered concurrently across multiple project phases, drawing on its Australian team, specialist engineering providers, and its Global Integrated Delivery team supported by resources in China and Chile. Initial early-phase EPCM activities have already commenced. Critically, however, the company noted that full project execution remains subject to final investment decision (FID) by BHP, and financial terms of the awards were not disclosed.
The contract win lands against a challenging financial backdrop. Worley’s FY2026 results, released in late August, showed revenue broadly flat to slightly lower in a range of A$10.7 billion to A$12.0 billion, while underlying EBITA fell 10.8% to A$734 million. Net profit after tax dropped roughly 42% to A$238 million, with earnings per share declining to A$0.47 from A$0.78 in FY25. The result absorbed A$58 million in disruptions linked to Middle East geopolitical conflict and a further A$50 million foreign exchange translation headwind. Net margins compressed from 3.6% to 2.2%.
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
Looking ahead, management has guided to mid-to-high single-digit revenue and EBITA growth for FY2027, though earnings are expected to be heavily weighted toward the second half with margins broadly flat. Consensus EPS forecasts for FY27 were trimmed by between 10% and 19% in the wake of the results, a key driver of the recent share price weakness. The company continues to return capital, maintaining an on-market share buyback and a A$0.50 per share annual dividend, equating to a trailing yield of around 5.1%.
What Lay Ahead?
On the positive side, early involvement in study and EPCM phases typically positions a contractor favourably for larger scopes of work if projects receive final approval, and copper’s role in electrification gives the work long-dated strategic relevance. Several brokers have framed FY27 as a “reset year” in which the non-recurring Middle East and FX headwinds begin to fade, potentially allowing underlying performance to re-emerge.
Technically, the A$10 level now acts as an initial pivot, with support near the recent A$9.80 lows. The dividend yield and active buyback may provide some valuation cushioning, but compressed margins leave limited room for operational missteps in a sector where peer multiples remain under pressure from elevated capital costs and cautious spending among traditional oil and gas clients.
With Worley shares just coming off it’s lowest level in four years, there is plenty of the bear case already built into the price, yet whether this marks a turning point for a bounce, or a pause before selling continues will only be told in time. The bounce from oversold levels to an RSI of 39 has allowed the technicals to cool off, and the stock remains firmly below the 50day, and 200 day moving averages ($10.66, $11.90). A green day that reclaims the A$10 handle gives both sides an angle as the week progresses.
Bull Case:
- BHP contracts deepen tier-1 client ties and anchor future copper order book.
- Copper and critical minerals exposure aligns with long-term electrification spending growth.
- 5.1% dividend yield and active buyback provide downside valuation support.
Bear Case:
- Both BHP projects await final investment decision, leaving revenue timing uncertain.
- FY26 profit fell 42%, with margins compressed and FY27 earnings back-loaded.
- Undisclosed contract values make near-term earnings contribution difficult to model.
