Bank of America Reiterates Buy, $92 PT on Waters

Bank of America maintains its Buy rating and $92 target price on Waters

following a first look on 4Q11 earnings from the company. Bank of America comments, "WAT reported 4Q11 revenues of $521 mn (+8% y/y; 0% F/X), above our estimate of $513 mn and the Street's $516 mn. Organic growth was approximately 8% (vs. a 13% y/y comparison), above our estimate of 6% and company guidance of +7%. Non-GAAP gross margin of 60.8% (-10 bps y/y) was mostly in line with our 61.0% estimate, while operating margin of 32.2% (+90 bps y/y) was below our 33.0% estimate, chiefly due to higher SG&A expenses. Non-GAAP EPS of $1.56 were above our and the Street's estimate of $1.50, with some benefit from top-line leverage and a lower than expected tax rate. Overall, the quarter was above expectations, but 1Q12/FY2012 guidance and market commentary will be key to trading direction, in our view." WAT closed at $78.76 a share on Monday.