Monadelphous's Strong FY26 Meets a Flattish FY27 Guidance Reset

Strong contract wins including a major Rio Tinto deal drove 50% EPS growth, but flattish FY27 revenue guidance triggered a sharp pullback as the stock digests its 2025 gains.

31 Aug 2026 · 3 min read

Monadelphous Group delivered a strong run of new contract wins and 50 percent EPS growth in FY26, benefiting from structural and cyclical growth in engineering and construction activity across iron ore and mining services, before a flattish FY27 guidance outlook triggered a sharp 10 percent fall as the stock digests a doubling in value through 2025.

An under-appreciated mining services sector rewarded for discipline

Plato Investment Management, a buy, said the mining services area of the market is generally under-appreciated at the moment, acknowledging it is a fairly risky area where companies can mismanage projects, overbid, and end up blowing up, costing the share price 30 percent, which has often happened, but believes the current market holds a bunch of well-run companies including Monadelphous.

We think the mining services area of the market is one that's generally under-appreciated at the moment. This is an area of the market that is fairly risky. They can mismanage projects, overbid for a project, and then end up blowing up and costing the share price 30%. And that's what's often happened. But we think in the current market, there's a bunch of well-run companies.

— Plato Investment Management, Article, March 2026

Contract wins confirm structural and cyclical growth

Yarra Capital Management, overweight, said the mining services company outperformed after a continued high level of new contract wins and extensions, continuing to hold a small position given structural and cyclical growth in engineering and construction activity, alongside continued defensive growth in maintenance services. Centennial Asset Management said Monadelphous was one of its bigger holdings, done really well, exposed mainly to iron ore and providing services for major companies doing incredibly well, with newsflow confirming a lot of contract wins.

The mining services company outperformed during the period after a continued high level of new contract wins and extensions. We continue to hold a small MND position given structural and cyclical growth in engineering and construction activity and continued defensive growth in maintenance services.

— Yarra Capital Management, Monthly Report, January 2026

Profit-taking amid a strong order backlog

Clime Investment Management said it reduced its portfolio position in Monadelphous, with the operating environment remaining supportive and management continuing to execute well, taking the opportunity to lock in further profits and reduce portfolio risk, with Monadelphous remaining a core holding given its growth outlook underpinned by a strong order backlog and improving earnings mix toward higher margin work.

A major Rio Tinto contract, then a flattish FY27 guidance disappointment

Pendal Group said Monadelphous rose 0.6 percent after announcing the award of a contract with Rio Tinto for the design and construction of non-process infrastructure at the Brockman Syncline 1 project, valued at $165 million, commencing in 2026 with completion expected in 2028. Pendal separately said the stock fell 10.1 percent after its FY26 result came in line to slightly ahead of consensus, but the focus was qualitative FY27 guidance for flattish revenue with potential for modest growth, with engineering and construction work won falling into FY27 and beyond, and margins at least held flat, noting that while FY26 numbers were strong with EPS up 50 percent, this is a business growing into its multiple after the stock doubled in CY25.

The FY26 numbers were strong with EPS +50%, but this is a business growing into its multiple after the stock doubled in CY25.

— Pendal Group, Newsletter, August 2026

What fund managers say they are watching next is conversion of the $165 million Rio Tinto Brockman Syncline contract and other engineering and construction wins into FY27-plus revenue, whether margins hold flat or improve as guided, continued strength in the order backlog, and whether the stock's valuation proves sustainable after doubling in CY25.