breakout, page-2

Light volume but break consolidated. Low to mid 90s next resistance.

AUD depreciation a great tailwind.

Limited but good broker coverage:

Macquarie:
"The company has been awarded a US$682m contract to build two Littoral Combat Ships (LCS). Macquarie thinks this award may ease investor worries over the impact of the US government spending cuts and about the US Navy's intentions for the LCS.

Austal has now fully sold Macquarie's forecast FY14 revenue of $1bn for the US business. The Outperform rating is retained and the price target is steady at $1.18."

JP Morgan:
"The US Department of Defense is having Austal build two more Littoral Combat Ships (LCS) for US$682m. The broker notes the positive market reaction was more than understandable, especially given the concerns generated by talk of US military budget cuts and some past critical comments about the LCS program.

Execution risk on US Navy contracts is always high, but JP Morgan believes the risk/reward picture is now well skewed to the reward side for investors with a medium term horizon. Overweight call maintained. Target $0.94."