ASX industrials stock ALS Ltd (ASX: ALQ) hit yearly highs back in March.
However since then, it has fallen over 14%.
A new note out of the team at Morgans suggests this could be an opportunity for investors to buy the dip.
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Company overview
ALS is one of the world's largest laboratory testing, inspection, certification, and verification businesses. It operates from around 350 sites across 65 countries.
The company also provides environmental, pharmaceutical, and food and beverage testing and certification. ALS has a multi-billion dollar market capitalisation and is part of the ASX 100.
Its share price rose 60% in the 12 months to March 2026, however since then has been on a downward trend.
However the team at Morgans expects this to be corrected over the next 12 months.
Here's what the broker had to say.
Perfect storm presents an opportunity
The team at Morgans said this ASX industrials stock's recent share price weakness reflects a perfect storm of headwinds – slowing organic growth from offshore peers, FX pressure, Middle East exposure, and concerns around fuel availability.
We have sought to capture the first three in our forecasts and see limited net impact at the group level, as softer Life Sciences growth is offset by a stronger Commodities outlook. Fuel availability is an unknown, though we view any disruption as a blip given juniors' balance sheets and supportive commodity prices. Copper is trading at all-time highs (US$6.65/lb) and the GDXJ is back around the 2011-12 cycle peak, when exploration spend topped US$20.0bn. This is +65% above CY25 spend (US$12.4bn) and over +125% higher in real terms.
Target price rises
Based on this guidance, Morgans has increased its price target to $27.20 (from $25.30).
From yesterday's closing price of $22.27, this indicates a 22% upside.
Morgans isn't the only broker with an optimistic view for this ASX industrials stock.
According to TradingView, 8 analysts offering a one year price target have an average price target of $24.34, and maximum of $28.
This indicates an upside potential between 9% and 25%.
Similarly, UBS recently put a buy rating on the business, with a price target of $26.
The broker said there are early signs of a recovery in the resources exploration cycle.
Geochemistry demand continues to be driven primarily by major miners, despite increased capital raising activity among junior and mid-tier miners, indicating the sector remains in the early stages of the exploration cycle.
UBS also noted that ALS appears to be recapturing previous geochemistry pricing discounts as demand strengthens.
