In morning trade the Monadelphous Group Limited (ASX: MND) share price is pushing higher.
At the time of writing, the engineering company’s shares are up over 1% to $11.90.
This latest gain means the Monadelphous share price is now up 17% since this time last month.
Why is the Monadelphous share price pushing higher today?
Investors have been buying Monadelphous shares this morning after it released an announcement which revealed several new contract wins.
These contracts are with Australia’s two largest miners, BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
According to the release, the new construction and maintenance contracts with Rio Tinto and BHP have a combined value of approximately $60 million.
What are the contracts?
Monadelphous has been awarded three three-year master services contracts with Rio Tinto.
These are for the delivery of sustaining capital projects across various mine sites and port operations throughout the Pilbara region in Western Australia.
Management advised that the work includes structural, mechanical and piping, electrical, instrumentation and controls, and non-process infrastructure projects.
In addition to this, Monadelphous has secured another three-year contract with Rio Tinto, with a two-year extension option. This is to provide mechanical, electrical and access maintenance services for fixed plant shutdowns at its Gove operations in the Northern Territory.
Rio Tinto’s Gove operation is a leading producer of bauxite and has been supplying the global aluminium industry with the product for more than 40 years.
As for the BHP contract, management revealed that it has secured a 12-month extension to its existing mechanical and electrical maintenance, shutdown, and project services contract across BHP’s Western Australian nickel operations.
Is the Monadelphous share price in the buy zone?
One broker that still sees upside for the Monadelphous share price is Citi. It currently has a buy rating and $12.63 price target on its shares.
This price target implies potential upside of 6% excluding dividends.
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