MLG Oz (ASX:MLG) is expected to show improved profit margins in the second half of the year and into 2026, and generate more free cash flow and reduce debt, said Euroz Hartley in a Monday note after the company disclosed its contract with Rio Tinto (ASX: RIO).
The company has secured a one-year AU$20 million contract with Rio Tinto to provide bulk haulage and site services at the Western Turner Syncline Mine in Western Australia, according to a Monday filing with the Australian bourse.
The research firm said it has increased its 2026 expectations after the contract to earnings before interest, tax, depreciation, and amortization of AU$73 million from AU$70 million.
The research noted that the company is trading cheaply at below its net tangible asset value of AU$1.02 per share.
Euroz Hartleys maintained MLG Oz's buy rating with an increased price target of AU$1.02 from AU$1.
The company's shares fell 2% on market close.