Monadelphous Group Ltd (ASX: MND) shares have been on form this week.
Investors have been bidding the diversified services company's shares higher after it released a strong half-year result.
For the six months ended 31 December, the ASX 200 stock reported a 52.6% increase in net profit after tax to $64.9 million.
The good news is that the company's managing director, Zoran Bebic, believes this positive form can continue. He said:
Long-term demand in the resources and energy sectors is expected to continue, supported by an improved global economic growth outlook. Continued investment in new and existing operations in Western Australia's iron ore sector is driving demand for both maintenance and construction services, with the energy sector to offer substantial prospects.
The even better news is that Bell Potter doesn't believe it is too late to invest in this ASX 200 stock.
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What is the broker saying?
Bell Potter has been impressed with Monadelphous' performance in FY 2026 and notes that it is going "from good to great." It highlights that the ASX 200 stock delivered a first-half result ahead of expectations. It said:
Group revenue (including JV sales) was $1,530m (BPe $1,502m), up 46% YoY, and in line with guidance. Engineering Construction division revenue was $678m (BPe $671m), up 67% YoY, reflecting significant growth in work delivered from contracts awarded over the past 18 months, greater activity at Zenviron and an expansion of end-to-end capabilities. Maintenance and Industrial Services revenue of $852m (BPe $835m) was a record and up 32% YoY, with growth driven by increased turnaround activity and brownfield energy work delivery, and sustained elevated demand from iron ore clients.
EBITDA margin of 7.6% was ahead of our 7.3% and consistent with the PcP. The stronger than expected EBITDA margin drove a 5% beat to our EBITDA forecast. NPAT of $64.9m (BPe $60.8m), was up 53% YoY. An interim fully franked dividend of 49cps was declared (BPe 46cps).
Should you invest?
In response to the results, Bell Potter has retained its buy rating on its shares with an improved price target of $37.00 (from $33.00).
Based on its current share price of $30.55, this implies potential upside of 21% for investors over the next 12 months. In addition, the broker is forecasting a 3.2% dividend yield over the period.
Bell Potter believes that the ASX 200 stock is positioned to sustain its strong operating momentum. It said:
Our Target Price lifts to $37.00/sh (previously $33.00/sh) given the more optimistic earnings growth outlook. We retain the Buy recommendation. We expect MND can sustain current strong operating momentum across the Group in the short-term given its contracted position and further work package awards likely to land in 2H FY26. MND's increasing liquidity gives the company optionality to lean aggressively on M&A or return excess capital to shareholders.
