First Waratah train on line

After an 18-month delay, Downer EDI has seen its first Waratah train set begin passenger service on Sydney's commuter rail network. The project followed two hefty profit downgrades and the departure of three chief executives before reaching this milestone.

Some analysts consider the completion of the first Waratah train a potential catalyst that could help Downer EDI's battered share price recover. The milestone signals progress on a high-profile contract and may influence investor sentiment about the company's delivery capability.

Downer CEO Grant Fenn said there has been a lot of hard work from Downer and RailCorp to get to this point and the company looks forward to delivering the remaining trains over the next three years.

Shares in Downer closed 1.6% higher at $3.76 after the announcement that the first Waratah train had begun passenger service, indicating a positive short-term market reaction.

Analysts warned there remain material risks, notably the project consortium's funding and the contractor's ability to deliver the remaining trains consistently on time. These factors could affect future progress and Downer EDI's financial outlook.

Two hefty profit downgrades and the removal of three chief executives preceded the recent milestone, contributing to a weakened share price and investor concern. The first train's completion may help confidence, but it doesn't erase the prior issues.

No. While some analysts view the milestone as a positive catalyst, others say recovery is not guaranteed because funding and delivery risks remain. Investors should treat it as one potential positive signal rather than a certainty.

Investors should watch progress on delivering the remaining trains over the next three years, any updates on the project consortium's funding, future profit guidance from Downer, and analyst commentary—since these will directly affect Downer EDI's outlook and share price.