ALS "Mineral exploration cycle recovery well underway." (Buy) Reilly

Research evidence excerpt

ALS "Mineral exploration cycle recovery well underway." (Buy) Reilly

ed

03/28E 0.83 0.92 11 0.96

cost inflation. Our FY27 Group EBIT growth forecast of 13% includes Commodities EBIT

03/29E 0.89 0.95 7 1.00

+16% vs. pcp and margin +122 bps to 30.7%. We note that ALS' guidance appears to

imply a relatively conservative view for the Minerals business (1H27 organic revenue Nathan Reilly

growth 15-17% vs. ~27% in 2H26, and a slight moderation in growth in 2H27) given Analyst

macro uncertainty and potential market capacity constraints (i.e. juniors' access to nathan.reilly@ubs.com

drillers). We forecast FY27 sample volume growth of +12% and price +1%, reflecting +61-2-9324 3156

our view that the exploration cycle is still early stage (April equity raisings +75% vs. pcp). Will Wilson

For Life Sciences, ALS expects MSD organic revenue growth and incremental margin Analyst

improvement of +30-50bps, and we expect EBIT growth of 4%. will-za.wilson@ubs.com

+61-2-9324 3848

Exploration recovery underway and driving EPS growth. Buy. Felix Zhang

We maintain our Buy rating on ALS with the stock trading at a 1yr fwd EV/EBITDA of Analyst

felix.zhang@ubs.com

13x, broadly in line with where the stock has traded at during previous exploration

+61-2-9324 3406

upcycles, albeit the current gold price is c.2.5x higher. Our Buy thesis is underpinned by

the view that the record gold price is driving a recovery in exploration activity, supporting

a c.8% 3yr EPS CAGR.

Valuation: 12m price target A$27.00 (was A$26.00)

Our SOTP-based PT increases +4% to A$27.00 and we lift FY27/28E EPS estimates

+11%/+11% respectively on a better outlook for Minerals volumes.

Highlights (A$m) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E

Revenues 2,586 2,999 3,320 3,494 3,660 3,836 4,026 4,225