Worley Ltd (ASX: WOR) shares are having a good session on Wednesday.
In afternoon trade, the ASX 200 industrials stock is up almost 2% to $13.20.
This latest gain means that the professional services company's shares are now up 13% since this time last month.
Can this run continue? Well, one leading broker certainly believes it can. Let's dig deeper into things.
Can this ASX 200 industrials stock keep rising?
According to a note out of Macquarie Group Ltd (ASX: MQG), its analysts see potential for Worley's shares to rise strongly from current levels.
Macquarie notes that the ASX 200 industrials stock has just released an update, which has reaffirmed its guidance for FY 2025. It said:
We wrote early May that impacts of slowing global growth/tariffs were likely more relevant to FY26. This looks to be the case with WOR reiterating FY25 guidance (low double-digit EBITA growth, 8.0-8.5% EBITA ex procurement margin) and noting it has not seen material project cancellations in CY25TD.
Global integrated energy cos have broadly maintained capex 2025 guidance and projects post FID are continuing. Notwithstanding this, we expect FY26e to be a slower growth year and fct EBITA growth of +4% vs FY25. This translates to 6% FY26e EPS growth also incorporating part of WOR's buyback ($150m out of up to $500m).
In light of this, the broker has reiterated its outperform rating on Worley's shares with a slightly improved price target of $15.85 (from $15.65).
Based on its current share price of $13.20, this implies potential upside of 20% for investors over the next 12 months.
Don't forget the dividends
In addition, the broker is forecasting unfranked dividends of 50 cents per share in FY 2025, FY 2026, and FY 2027. This would mean dividend yields of 4.4% each year, which boosts the total potential 12-month return to over 24%.
To put that into context, a $10,000 investment would turn into approximately $12,400 if Macquarie is on the money with its recommendation.
Commenting on the update and its valuation, the broker concludes:
Solid update re FY25 guidance affirmation, backlog up slightly & sales pipeline up ex VG CP2. Stock tracking oil price despite diversity in resources/chemicals & trades at >20% below EPS correlation and lagging global engg peers YTD. Stock now at 14.3x FY25E/13.4x FY26E P/E (vs 16.4x LTA).
All in all, this could make Worley worth considering if you're looking to diversify your portfolio with some exposure to this side of the market.
