Macquarie expects earnings growth will prove to be robust when the company reports its FY19 result on May 21. Life Sciences produced strong sequential improvement in the first half and the broker expects a margin expansion of 130 basis points in the second half.
Margins are expected to be supported by improving market demand in Canada, Latin America and Australia. Softness in the US is expected to be offset by the strong performance elsewhere.
The broker observes the stock is now trading at a -18% PE discount to global peers, versus the traditional -10% discount. Outperform maintained. Target is raised to $8.76 from $8.58.
Sector: Commercial & Professional Services.
Target price is $8.76.Current Price is $7.64. Difference: $1.12 – (brackets indicate current price is over target). If ALQ meets the Macquarie target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
