Jefferies sees strong H1 for Australia's ALS on strength in exploration

ALS

10/11/2022 19:30

** Strength in exploration activity should see a strong
first half for Australia's ALS  ALQ.AX , says Jefferies; flags
decline in commodity prices and junior miner raisings has raised
concerns around the outlook post CY22
    ** Forecasts 1H EBIT of A$248 million ($163.01 million) and
NPAT of A$161 mln which is at the upper end of co's NPAT
guidance for 1H
    ** Brokerage also sees a 16% jump in 1H EBIT in Life
Sciences, 32% in Commodities and 13% in Industrial divisions for
the testing services provider  
    ** Jefferies keeps price target at A$14; maintains 'buy'
rating; gives FY23 NPAT estimate of A$318 mln
    ** Finally adds that outlook is less certain, as co's
budgets are yet to be determined, which suggests a potentially
softer 4Q and beyond
    ** Five of nine analysts rate the stock "buy" or higher and
four "hold" or lower; their median PT is A$13.15 – Refinitiv
data
    ** Stock has fallen 12.4% this year, as of last close
($1 = 1.5214 Australian dollars)
 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))