Jefferies sees strong volume growth in commodities, life sciences unit of ALS

ALS

25/05/2022 23:55

** Jefferies sees strong volume growth in testing services
provider's  ALQ.AX  two key divisions - commodities and life
sciences
    ** Brokerage says volumes in the commodities division is
likely to be +10% to +15% in FY23 and revenue could be +15% to
+25% 
    ** Says life sciences earnings are primarily driven by
invested capital
    ** Jefferies estimates that Nuvisan, a European
biopharmaceutical business in which ALQ has a stake of 49%, will
initially deliver about 12% return on invested capital (ROIC)
    ** Adds growth capex in the life sciences division will
deliver about 10% to 13% capacity increase and may deliver a
ROIC of greater than 25% at average segment margins
    ** Brokerage increases EBIT estimates by 1% and 3% in FY23
and FY24, respectively
    ** Six of 10 analysts rate the stock "buy" or higher, three
"hold" and one "sell" or lower; their median PT is A$13.80 –
Refinitiv Eikon data 
    ** As of last close, ALQ stock had fallen ~9.9% this year 

 (Reporting by Upasana Singh in Bengaluru)
 ((Upasana.Singh@thomsonreuters.com))