• On August 1, 2025, Downer EDI Limited announced its participation in a Project Alliance Agreement to construct the southern section of the taki to North of Levin highway in New Zealand, securing approximately NZ$311 million (A$280 million) in revenue as part of the 2NL South Alliance for NZ Transport Agency Waka Kotahi.
• This extensive project award came after more than a year of collaborative project scoping and paves the way for Downer's continued role in major New Zealand infrastructure developments.
• We’ll assess how winning such a sizable highway contract in New Zealand could affect Downer’s ongoing transformation strategy and future opportunities.

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Downer EDI Investment Narrative Recap

Downer EDI shareholders must believe in the company's ability to execute its transformation strategy and secure high-quality infrastructure contracts in Australia and New Zealand. The recent NZ$311 million (A$280 million) highway contract in New Zealand represents a welcome addition to revenue, but does not resolve the underlying uncertainty about management’s ability to maintain a stable pipeline of new work, the most important short-term catalyst, just as timing gaps in contract wins remain the biggest risk.

One of the most relevant recent announcements is the A$540 million Powerco Electricity Field Services Agreement signed in March 2025. This long-term contract, like the New Zealand highway award, is significant for Downer’s future work pipeline and aligns with the transformation strategy aimed at revenue stability, though both do not necessarily guarantee the elimination of risk around contract timing issues.

In contrast, investors should be aware of timing gaps between contract wins and their impact on...

Read the full narrative on Downer EDI (it's free!)

Downer EDI's outlook anticipates A$12.2 billion in revenue and A$401.8 million in earnings by 2028. This is based on an annual revenue growth rate of 4.6% and an increase in earnings of A$341.9 million from the current A$59.9 million.

Uncover how Downer EDI's forecasts yield a A$6.21 fair value, a 9% downside to its current price.

Exploring Other Perspectives

Fair value estimates from four Simply Wall St Community members range from A$6.21 to A$41.51 per share. With ongoing uncertainty around future contract pipelines, you could see substantial differences in opinions about Downer EDI’s potential, investor perspectives like this highlight why it’s valuable to compare several viewpoints when considering the stock.

Explore 4 other fair value estimates on Downer EDI - why the stock might be worth 9% less than the current price!

Build Your Own Downer EDI Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Downer EDI research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Downer EDI research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Downer EDI's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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