Macmahon is driving towards its revenue mix target, which it expects will deliver capital-light earnings growth, ensuring strong free cash flow generation, 20%+ returns on assets, and allow a higher dividend payout without compromising the balance sheet. These efforts should be rewarded with a higher valuation, uncertainty around Decmil earnings notwithstanding. We upgrade to $0.45 (prior $0.39) and maintain a BUY call.
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