Market Overview

Waters Has Limited Upside Potential To Growth Expectations; Janney Steps to The Sidelines

Share:

There are better alternatives to Waters Corporation (NYSE: WAT) in the life sciences tools sector from the perspective of acceleration in organic growth, according to an analyst at Janney.

The Analyst

Paul Knight downgraded Waters Corp from Buy to Neutral and lowered his fair value estimate from $230 to $211.

The Thesis

Growth and earnings at Waters Corp are likely to be in line for Q2, but there's limited scope for upside to the 5-6 percent organic growth estimate for FY2019 or more, Knight said in a Tuesday note.

The analyst noted the company is focused on slower-growth pharmaceutical QC, while it's subject to competitive pressure in biological research from companies such as Thermo Fisher Scientific Inc. (NYSE: TMO), Agilent Technologies Inc (NYSE: A) and Sciex. The salesforce reorganization the company is implementing will take time to gain traction, the analyst added.

That said, Knight sees revenue visibility from high China growth and earnings visibility from a 3-year share repurchase authorization.

Instead, Janney prefers LONZA Grp AG/ADR (OTC: LZAGY), which it recently initiated at a Buy. Knight views the company as positioned for accelerating growth.

Janney also expects a more modest acceleration at Thermo Fisher, with its $2-3 billion of bioproduction exposure.

Price Action

Shares of Waters Corp are nearly flat for the year-to-date period.

Related Links:

Buy Thermo Fisher On Amazon Fear-Inspired Dip

The Week Ahead In Biotech: Conferences, Clinical Trial Results, IPOs And More

Latest Ratings for WAT

DateFirmActionFromTo
Oct 2019DowngradesEqual-WeightUnderweight
Jul 2019DowngradesNeutralUnderperform
Apr 2019MaintainsNeutral

View More Analyst Ratings for WAT
View the Latest Analyst Ratings

Posted-In: Janney Paul KnightAnalyst Color Downgrades Price Target Analyst Ratings

 

Related Articles (A + LZAGY)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

American Tower Downgraded Ahead Of Earnings

Mamma Mia: Another Country ETF Could Contend With Rate Hikes