Jefferies cautious on Australia's ALS after 'surprise' capital raising announcement, trims PT

ALS

27/05/2025 20:56

** Jefferies says equity raising by ALS ALQ.AX is a surprise in company's annual results and perhaps could be internally funded to avoid share dilution

** Laboratory testing services provider, on Tuesday, in its FY25 report announced A$350 million ($225.54 million) equity raising to fund developments of its four key laboratories

** Company's FY25 result in line with expectations - Jefferies

** ALS's rationale for lab expansions positively signals management's pipeline expectations - brokerage

** Jefferies adds risks remain on execution and flags raising equity "won't be well-received"; highlights lab expansion benefits are not set for another two to five years

** Brokerage downgrades stock to "hold" from "buy", trims PT to A$18.2 from A$18.8

** Stock up about 17% so far this year, as of last close

($1 = 1.5518 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru)

((Nikita.Jino@thomsonreuters.com;))