BTIG Downgrades Bruker, Still Likes Long-Term Story

BTIG has downgraded Bruker Corporation

to Neutral from Outperform, saying that the "margin story continues to play out but are hesitant to expect upside to its current organic growth forecasts this early in 2016." The scientific equipment maker reported first quarter EPS of $0.21, beat BTIG's expectation by $0.05 and consensus estimate by $0.06. The company generated revenue of $375.4 million in the period, also exceeding Street forecast of $358.5 million. Analyst Dane Leone said revenues grew 5.6 percent organically, which also beat his about 2 percent estimate, helped by strength within the Nuclear Magnetic Resonance (NMR) business. Operating margin rose 245bps and Leone thinks the next leg of margin expansion will come from after-market revenues. However, the analyst noted that though NMR strength continues, comps will become more difficult during the second half of the year. "Backlog growth seemed healthy across all business segments, but for the larger items within NMR, predicting quarterly conversion of backlog is difficult," Leone wrote in a note. However, the analyst likes the company's long-term story saying that strong margins for the third quarter in a row indicate improving organizational efficiency. Bruker expects full-year earnings in the range of $0.97 to $1.02 per share, while Street expects earnings of $1.01 a share and BTIG estimate earnings of $1.02 a share. Shares of Bruker closed Wednesday's trading session at $27.65.