Perenti Re-Rates on Record Results, Managers Eye Drilling Upside

Maple-Brown Abbott says the mining services contractor has moved from dirt cheap to close to fair value after delivering on contract renewals

31 Dec 2025 · 3 min read

Mining services contractor Perenti has re-rated from what one fund manager called dirt cheap levels to something closer to fair value, on the back of record FY25 results, resumed capital returns and a growing view that its drilling division holds the next leg of earnings growth.

From a tough two years to record results

Maple-Brown Abbott's October 2025 account captured the turnaround. Perenti's Barminco underground contracting business had a difficult 2023 and 2024, with the market worried about key contracts not being renewed and cash flow being pushed out. The manager kept its position through that period, buying more while the stock traded on a multiple of four to five times earnings. What followed was contract renewals, cash flow ahead of market expectations, and a solid earnings growth outlook, re-rating the stock to around 13 times by October 2025.

It was trading on a multiple of four or five times, so absolutely dirt cheap. What they ended up delivering was contract renewals, cashflow better than the market thought, and a very solid earnings growth outlook as well. So it's rerated to 13 times today. It's probably closer to fair value. I do think that the next leg of growth is going to be driven by their drilling business.

— Maple-Brown Abbott, Article, October 2025

Record earnings and a resumed buyback

Infinity Asset Management flagged the scale of the improvement in August 2025, when Perenti shares advanced 34.5 per cent on record FY25 results: revenue of $3.49 billion and net profit after tax of $138 million, broadly in line with consensus given prior guidance, but with the market responding positively to strong cash flow generation and forward guidance of free cash flow exceeding $160 million for FY26, on revenue of $3.45 billion to $3.65 billion.

Alliance Bernstein's September 2025 quarterly commentary added that management had highlighted strong momentum in the contract mining division, with subsequent contract wins reinforcing confidence in the growth pipeline, while the resumption of the share buyback programme signalled management's own confidence in ongoing cash flow generation.

Where the next leg of growth is expected to come from

With the stock closer to fair value after its re-rate, Infinity Asset Management trimmed its position in October 2025 to lock in profits after the strong run. Oracle Advisory Group, holding the stock alongside a similar mining services name, NRW Holdings, said its thesis for Perenti was the same as its NRW thesis: that earnings over the next few years will come in better than the market currently expects, a view Maple-Brown Abbott ties specifically to growing demand for Perenti's drilling business as junior miners deploy freshly raised exploration capital into the ground over the next two to three years.