Waters Corp (NYSE:WAT) stock fell 0.75% (As on October 9, 11:51:45 AM UTC-4, Source: Google Finance) after Jefferies elevated its position on the stock, a prominent analytical instrument manufacturer, from Hold to Buy. The firm also increased its price target for the company’s shares to $415 from the previous $355.
This adjustment comes as a result of new insights from recent channel checks, which bolstered the firm’s confidence in the commencement of the liquid chromatography-mass spectrometry (LCMS) replacement cycle.
The analyst at Jefferies noted that these replacement cycles typically lead to around a 300 basis points increase in performance. They highlighted that Waters Corp is well-positioned to capitalize on this cycle due to its updated product offerings, including the Alliance iS system.
The company is expected to benefit from various factors, such as its market mix, with a strong presence in Chinese generics and the Indian market, as well as emerging growth drivers like Good Laboratory Practices (GLPs) and analysis of per- and polyfluoroalkyl substances (PFAS).
Waters Corp’s focus on its core competencies, without the distractions of other business segments like NASD or DGG, is another reason for the upgrade. The analyst expressed a preference for Waters Corp over its competitor Agilent, which also holds a Hold rating, due to these strategic advantages.
The announcement of the upgrade and the new price target represents a significant increase in the anticipated value of Waters Corp’s shares. The firm’s revised outlook suggests a positive view of the company’s market position and its potential for growth in the near term.
In other recent news, Waters Corporation has been the focus of several significant developments. The company’s second-quarter earnings call revealed a resilient performance despite a continuous decline in sales.
Waters Corporation revised its full-year sales guidance for 2024 to a decline of -2% to -0.5%, with an adjusted operating margin of around 31%. The company’s new product launches, such as the Xevo MRD and Acquity QDa II, have been positively received by customers, contributing to a cautiously optimistic outlook for the latter half of the year. The Company expects full-year 2024 non-GAAP EPS to be in the range of $11.55 to $11.65, which includes an estimated headwind of approximately 3% due to unfavorable foreign exchange. The Company expects third quarter 2024 non-GAAP EPS to be in the range of $2.60 to $2.70. The Company expects third quarter 2024 constant currency sales growth to be in the range of +1.0% to +3.0%.