ALQ – Macquarie rates the stock as Outperform

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The broker notes lead indicators for ALS’ geochem business are improving, with Canadian resource raisings up 66% in the first half of 2020 and Australian raisings also lifting off low levels. Typically there is a 2-3 month lag for resource raisings to flow into additional exploration activity.

The broker is also now more positive on the USD gold price outlook. ALS is lagging peers on a valuation basis. Outperform and $7.78 target retained.

Sector: Commercial & Professional Services.

Target price is $7.78.Current Price is $6.67. Difference: $1.11 – (brackets indicate current price is over target). If ALQ meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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