UBS upgrades to Buy from Neutral as the valuation appears highly attractive for the long-term growth trajectory. A commercialisation of the relationship with Dassault is a material near-term catalyst.
While the broker believes the company is unlikely to achieve FY20 guidance, demand for the product is unchanged and sales momentum is expected to be maintained into FY21. Target is reduced to $37.50 from $39.00.
Sector: Software & Services.
Target price is $37.50.Current Price is $26.40. Difference: $11.10 – (brackets indicate current price is over target). If ALU meets the UBS target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).
