Citi highlights more opportunities in the US after naval shipbuilding has been proposed to be included in the latest covid-19 relief measures. This includes Expeditionary Medical Ships (EMS) and Expeditionary Fast Transport (EPF).
If Austal is awarded the contract, Citi notes this will shore up its pipeline. This is important with the Littoral Combat Ship (LCS) program winding down, comments the broker.
The company’s ability to win new work with the US Navy is now enhanced by the its expansion into steel shipbuilding. The broker thinks the market is under-appreciating this at the moment.
Citi retains its Buy rating with a target price of $4.23.
Sector: Capital Goods.
Target price is $4.23.Current Price is $3.30. Difference: $0.93 – (brackets indicate current price is over target). If ASB meets the Citi target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
