Austal is transitioning to a range of new programs in the US, which dominate the $12.7B order book. We expect Australia to add to this under a Strategic Shipbuilding Agreement. It will take a few years to get to a steady drumbeat of ship production and for margins to stabilise at a higher level, but up to US$300M expected growth capex in the US reflects the opportunity. We maintain a BUY call on an unchanged valuation of $2.86.
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