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Thoughts towards Austal (ASB)

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Thoughts towards Austal (ASB)

Hi James and Team What is your view on Austal after it announced a deal with the Australian Government as a strategic partner in WA and picking up 2 new orders at an acquisition cost of $157m. Austal finished at $1.93 ( +3.49%) reaching a high 0f $2.05. Will the market re-rate ASB? regards Debbie


Hi Debbie,

On Friday afternoon ASB is trading back around $1.88 a few days after the news, basically unchanged for the week. The $675mn shipbuilder has been out of favour with investors since COVID and as we often say, don’t fight the tape – ASB remains too hard for us until further notice with a re-rating looking unlikely in the short-term.  They still have a lot of work to do building out their steel ship making capability, which relies heavily on the US navy to support. While we think the US will ultimately ‘feed’ ASB enough work, we also view this reliance as a risky one.

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Austal Ltd (ASB)
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