Wells Fargo Starts Waters (WAT) at Market Perform, Positives Already Priced In
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Price: $407.74 -1.07%
Rating Summary:
22 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
22 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Wells Fargo initiates coverage on shares of Waters Corp. (NYSE: WAT) with a Market Perform rating and a valuation range of $88 to $90.
The firm believes WAT's ongoing product refresh and replacement cycle in its core technologies of liquid chromatography and mass spectrometry will drive revenue growth. Wells Fargo also believes that this is already priced into the stocks price.
Wells Fargo sees WAT's margins in the future coming in smaller than of its younger peers, as the company has already made many changes to its operations for the most profitable production methods. Other companies may be able to cut costs in the future where WAT may have already done so there.
The company is targeting a a 15% non-GAAP EPS growth each year, with approximately one-third of that coming from buybacks. Management has bought back 30% of its shares since 2002, running around $2.5 billion. The firm expects that WAT will continue to follow this plan, but notes that investors take a liking more to acquisitions and research and development investments. Since this would drop the company's margin lower, Wells Fargo only sees WAT's making bolt-on acquisitions and nothing to extreme.
The firm released its 2011 and 2012 EPS estimates at $4.65 and $5.22.
For more ratings news on Waters Corp. click here and for the rating history of Waters Corp. click here.
Shares of Waters Corp. closed at $85.53 yesterday.
The firm believes WAT's ongoing product refresh and replacement cycle in its core technologies of liquid chromatography and mass spectrometry will drive revenue growth. Wells Fargo also believes that this is already priced into the stocks price.
Wells Fargo sees WAT's margins in the future coming in smaller than of its younger peers, as the company has already made many changes to its operations for the most profitable production methods. Other companies may be able to cut costs in the future where WAT may have already done so there.
The company is targeting a a 15% non-GAAP EPS growth each year, with approximately one-third of that coming from buybacks. Management has bought back 30% of its shares since 2002, running around $2.5 billion. The firm expects that WAT will continue to follow this plan, but notes that investors take a liking more to acquisitions and research and development investments. Since this would drop the company's margin lower, Wells Fargo only sees WAT's making bolt-on acquisitions and nothing to extreme.
The firm released its 2011 and 2012 EPS estimates at $4.65 and $5.22.
For more ratings news on Waters Corp. click here and for the rating history of Waters Corp. click here.
Shares of Waters Corp. closed at $85.53 yesterday.
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