Jefferies says outlook is 'favourable' for Australian mining services sector

Perenti

03/03/2023 01:07

** Analysts at Jefferies says outlook for the mining
services sectors is "favourable" as exploration is growing and
production is steadily improving in the sector 
    ** Brokerage says production is seeing improvement in
inflationary and labor conditions, although domestically-focused
companies were hurt by poor weather
    ** Says contract services provider NRW Holdings'  NWH.AX 
mining segment exceeded expectations, despite bad weather, as
mine owners looked to increase volumes to take advantage of
higher commodity prices
    ** Brokerage says the key driver for engineering co,
Monadelphous Group  MND.AX  over the next three to six months
will be contract awards
    ** Jefferies expect earnings and margins to improve for
mining services co Perenti Ltd  PRN.AX  
    ** Brokerage says it is confident that the project service
provider Worley  WOR.AX  should continue to see earnings
upgrades come through in the coming period  
    ** However, brokerage says NRW and Monadelphous Group are
facing increased price competition, in respect to award of
tenders 
    ** Shares of Monadelphous, NRW Holdings, Perenti have down
between 5.7% and 14.5% YTD, as of last close 
    ** Worley stock up 2.1% YTD as of last close 
    
   

 (Reporting by John Biju in Bengaluru)
 ((John.Biju@thomsonreuters.com;))