Austal (ASX:ASB) stock has traded off following a recent guidance cut, but strong execution of its more than AU$17 billion orderbook will eventually supersede the company's challenges, Euroz Hartleys said in a March 27 note.

The equity research firm recommends buying the dip as it sees around AU$3 billion in annual revenue driving AU$250 million to AU$300 million in earnings before interest and taxes outcomes for Austal over the coming few years.

The stock is trading at the lower end of its 12-month range and well below peers on guided earnings -"earnings that the orderbook clearly suggests are set for sustained and substantial medium and longer term growth," Euroz analyst Gavin Allen wrote.

The structural drivers of defense-related activity are still intact, and earnings growth in 2027 and 2028 is more probable than the alternative, according to the note.

Euroz Hartleys maintained its AU$7.71 target price and buy recommendation on Austal.