UBS Maintains a 'Buy' on Agilent (A); Shareholder Friendly Dividend Initiation Justifies Higher Valuation

UBS maintains a 'Buy' on Agilent (NYSE: A) price target raised from $43 to $47.

UBS analyst says, "Signal sent, signal received: mgmt knows it must wisely allocate capital: Agilent has publically stated its desire for M&A in key areas (esp Life Sciences). However, cash has kept accumulating (albeit offshore) and -thus far- Agilent hasn’t found a sizeable deal due to still-high seller expectations/valuations. Our ‘win-win’ thesis on capital deployment seems to be playing out: if attractive ROIC/accretive deals can’t be found, mgmt will go back to its roots and return cash. The wrinkle: we didn’t expect a dividend over a buyback, but it has been warmly received by investors who are pleased by the visibility from a clearer driver of equity returns."

For an analyst ratings summary and ratings history on Agilent click here. For more ratings news on Agilent click here.

Shares of Agilent closed at $41.00 yesterday.

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