With ALS recently upgrading full year guidance by 6% at the mid-point, now anticipating $260-265m, Macquarie notes the company should continue to benefit from the increased capacity and price environment that drove the upgrade through to the end of the year.
The company increased its commodity network capacity by 15%, while the recent MinAnalytical acquisition boosted WA capacity 40%. The broker notes increased capacity delivered some benefit in the second half but expects a larger impact in the year ahead.
Macquarie forecasts 15% earnings per share growth in FY23, up from a previous 11%.
The Outperform rating is retained and the target price increases to $14.70 from $14.00.
Sector: Commercial & Professional Services.
Target price is $14.70.Current Price is $13.44. Difference: $1.26 – (brackets indicate current price is over target). If ALQ meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
