E&P and Ord Minnett Issue Buy-Side Ratings on Australian Clinical Labs (ASX:ACL) with Upside Potential

Sonal Goyal

27 August 2025 03:29 PM AEST

E&P and Ord Minnett Issue Buy-Side Ratings on Australian Clinical Labs (ASX:ACL) with Upside Potential

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Highlights

E&P has rated Australian Clinical Labs as “Positive” with a price target of AUD 3.85, reflecting a 44.19% upside.

Ord Minnett has maintained a “Buy” rating on ACL with a price target of AUD 3.50, indicating a 31.09% upside.

Australian Clinical Labs Limited (ASX:ACL), a leading provider of healthcare facilities and pathology services, has attracted favorable analyst ratings from E&P and Ord Minnett following the release of its financial results for the year ended 30 June 2025 (FY25).

E&P analyst Gretel Janu has assigned ACL a “Positive” recommendation, setting a target price of AUD 3.85. This represents an upside potential of 44.19% compared to the current market price of AUD 2.71.

Meanwhile, Ord Minnett analyst Tom Godfrey reaffirmed a “Buy” rating with a target price of AUD 3.50, equating to a 31.09% potential increase from the current price.

These ratings come on the back of ACL’s FY25 results, where the company delivered revenue growth, underlying EBIT expansion of 8.7%, and a 13.4% rise in earnings per share to 17.8 cents. The company also improved free cash flow by 30.2% and declared a fully franked final dividend of 9.0 cents per share, taking the full-year dividend to 12.5 cents per share. Capital returns, including dividends and buybacks, totaled AUD 44 million, representing approximately 9% of current market capitalisation.

Looking ahead, ACL has provided FY26 guidance of Underlying EBIT between AUD 67 million and AUD 73 million and revenue in the range of AUD 760 million to AUD 780 million. Management noted that the lower end of the guidance reflects potential for slower pathology market growth compared to FY25. Despite headwinds from MBS fee cuts, ACL expects to leverage ongoing investments in digitalisation, artificial intelligence, and laboratory automation to improve efficiency and profitability.

Beyond FY26, ACL is targeting EBIT improvements of at least AUD 8 million in FY27 through strategic initiatives including upfront episode billing, price increases on non-MBS funded tests, and consolidation of laboratory operations.

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