Deutsche Bank Initiates Buy Rating on Agilent Technologies (A)

Deutsche Bank is out with a research report this afternoon, where it initiates a Buy rating on Agilent Technologies A; it has a $41.50 price target on the stock. The analysts said that, given the appeal of A's new business mix, margin and return profile, as well as valuation they believe the stock is a buy right here. They added that Agilent has made a conscious effort to reposition the business over the last few years, resulting in a balanced revenue mix across electronic measurement and life science/chemical analysis. As for valuation, they remarked, “Our $41.50 price target is based on two methodologies, DCF & peer comparables, but equates to a PE of 16x our FY11 EPS estimate of $2.55 and 14x our FY12 EPS estimate of $2.90, with $41.50 representing the midpoint of our DCF range. On a calendarized basis, our PT equates to PE of 16x our $2.61 CY11E and 14x our $2.95 CY12E.”