The Australian share market has traditionally delivered an average annual return of around 10%.
While that is a great return, the team at Bell Potter thinks you could potentially double this return with the ASX 200 stock in this article.
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Which ASX 200 stock?
The stock that Bell Potter is recommending to clients is ALS Ltd (ASX: ALQ).
It is a global testing, inspection, and certification (TIC) company, servicing clients across several industries.
Bell Potter notes that ALS commands a market-leading position in geochemical testing, leveraging its hub-and-spoke model, Laboratory Information Management System (LIMS) and innovative value-added capabilities.
In Life Sciences, it operates one of the largest global environmental testing businesses, with a footprint spanning 35+ countries.
It released its full-year results on Monday and delivered numbers that were largely in line with Bell Potter's expectations. It said:
ALQ's FY26 result was headlined by uEBIT of $599m, up 19.3% YoY and in line with BPe. Group uEBIT margin expanded 130bps to 18.0% (BPe 17.5%).
Key points: Operating result: Group organic revenue growth of +8.4% (BPe +9.1%), was led by Commodities (+18.1%; BPe +16.6%), with mixed performance reported at Life Sciences (+2.8%; BPe +4.8%). Expanding exploration activity in 2H across Junior, Intermediate and Major customers delivered an acceleration in sample volume growth and improved pricing dynamics, with lower-priced legacy contacts rolling off as guided.
It also notes that its guidance for FY 2027 was also in line with expectations. The broker adds:
Outlook commentary include: 1) FY27 Minerals organic revenue expected to rise 13.0-15.0% YoY (BPe old 14.5%), with 1H FY27 uEBIT margin to be consistent with 2H FY26 levels, then rising a further 30-50bps in 2H FY27; and 2) Life Sciences targeting mid-single digit organic revenue growth in FY27 (BPe old 4.6%), with incremental EBIT margin improvement of 30-50bps (BPe old 44bps).
Big potential returns
According to the note, Bell Potter has retained its buy rating on the ASX 200 stock with a trimmed price target of $26.00 (from $28.00).
Based on its current share price of $21.83, this implies potential upside of 19% for investors over the next 12 months.
In addition, a partially franked 2.3% dividend yield is expected in FY 2027, boosting the total potential return to approximately 21%.
Commenting on its buy recommendation, Bell Potter said:
Our downgraded Target Price reflects a higher WACC of 8.3% (previously 7.8%). We view the FY27 Minerals revenue and EBIT margin outlook as conservative, with FY26 exit-rates and exploration market indicators suggesting Minerals could deliver organic revenue growth of >20.0% in FY27 (BPe new 14.9% – within guidance).
