Austal (ASX:ASB) has seen a sell-off after recent highs of around AU$8.59, but nothing on the ground has changed operationally, according to a Thursday Euroz Hartleys note.
The company on Thursday said it was awarded a AU$1.03 billion design and build contract for landing craft medium (LCM) vessels under the firm's strategic shipbuilding agreement with the Commonwealth of Australia.
Euroz Hartley believes that at full ramp-up, and with good execution, ASB shares are worth a "good deal" more than the current share price.
The research firm added that the fundamental investment case for ASB has firmed up further, with the resolution of T-ATS, financing arrangements finalized, and Australian Defense requirements firming up.
Euroz Hartleys maintained its buy rating and raised its price target to AU$7.71 from AU$6.57.
The company's shares rose 4% in recent Friday trade.