Qiagen Has Steady Income And Defensive Growth Potential, Goldman Sachs Upgrades Stock

Qiagen NV QGEN has a steady income from selling tools for preparing samples and diagnostics. This kind of business tends to stay strong even when companies aren't spending much on big equipment. 

The Dutch life science stock is currently the cheapest name in the Goldman Sachs Tools coverage universe, trading at 13.3x' 24E EV/EBITDA vs. the sector at 16.5x despite growing core organic growth in the high single-digit to low double-digit range over the past year. 

The analyst expects these defensive characteristics to drive better than sector average growth in 2024. 

Hence, Goldman Sachs upgrades Qiagen from Neutral to Buy to reflect the defensiveness of their end markets and favorable valuation vs. peers.

QGEN is trading at a >5x discount to the rest of the Tools sector despite their revenue stream being more defensive in an uncertain environment, providing more visibility around 2025/2026 estimates.

QGEN's end market exposure positions them well in the current environment compared to the other Mature Tools names, given their defensive nature and the uncertainty in both timing and magnitude of Pharma demand normalization. 

Their Life Sciences product portfolio is not a large portion of customer budgets, protecting them from downturns in the Pharma R&D and Capex spending.

Price Action: QGEN shares are up 0.95% at $41.84 on the last check Thursday.