Morgan Stanley Cuts Agilent Outlook After This 'Shortfall'

In a report published Tuesday, Morgan Stanley maintained their Equal-weight rating on and price target of $47 for

. The company missed the organic estimates for Q2 by 300bps, driven by execution issues and tougher Energy markets. The company has, however, maintained its organic guidance despite the Q2 miss, which was primarily due to delayed shipments, which in turn were associated with start up problems at one of the company's logistics centers and a late order pattern during the quarter. The analysts believe that given the lack of robust organic orders, the company's current guidance for Q3 and the full year appears too optimistic and implies acceleration of over 500 bps in 2H. "A slightly stronger order build in 2H14 than what Agilent drove in 1H15 translated to only mid-single digit organic revenue growth in 1H15, suggesting downside risk to 2H15 revenues," the analysts said. Morgan Stanley has lowered its organic growth estimate for 2016, from 7.9 percent to 6.5 percent, while lowering the 2015 EPS estimate from $1.70 to $1.68.