KeyBanc has maintained a Sector Weight rating on Agilent Technologies Inc. (NYSE: NYSE:), following the company’s fiscal third-quarter earnings report.
Agilent achieved a top and bottom line beat, with management noting a “steady” improvement in market conditions. The company’s core revenue saw a lesser decline of 4.4% compared to the 7.4% drop in the second quarter of fiscal 2024.
The CrossLab group, which accounts for 26% of Agilent’s revenue, was a strong performer, posting a 5% core growth year-over-year. However, the Life Sciences and Applied Markets segment, representing half of the company’s revenue, experienced a 7% decline. The Chinese market continues to show weakness, with double-digit year-over-year declines, although there was some sequential growth.
Agilent’s management expressed expectations of returning to growth in fiscal year 2025, but has not yet provided formal guidance. The company aims to reach its long-term growth goal of 5-7% in fiscal year 2025 and beyond. The target is predicated on continued improvements in the capital equipment market.
KeyBanc has updated its model to reflect the third-quarter results and the latest guidance from Agilent. This comes as the company works towards its growth objectives amidst the ongoing reset in the capital equipment sector. Agilent’s performance and outlook suggest a cautious but potentially improving environment for the industry.
In other recent news, Agilent Technologies reported impressive third-quarter results, exceeding analysts’ expectations. The company posted adjusted earnings of $1.32 per share, surpassing the estimated $1.26 per share, and reported revenue of $1.58 billion, slightly above the projected $1.56 billion.
Following these results, several financial firms including TD Cowen, BofA Securities, Evercore ISI, and Citi have adjusted their outlook on Agilent. TD Cowen increased the price target to $160, while BofA Securities and Evercore ISI raised theirs to $147 and $135 respectively. Citi boosted its price target to $165.
InvestingPro Insights
With Agilent Technologies Inc. (NYSE:A) aiming for a return to growth in fiscal year 2025, a glance at the latest InvestingPro data and tips provides a nuanced perspective on the company’s financial health and market position. Agilent’s market capitalization stands at a robust $40.84 billion, underlining its significant presence in the industry. The company’s price-to-earnings (P/E) ratio is currently at 29.08, which may suggest a higher valuation compared to industry peers, and it’s worth noting that this has increased slightly to 31.23 over the last twelve months as of Q2 2024.
Despite recent revenue declines, the company’s gross profit margin remains strong at 50.63%, which indicates that Agilent is still able to effectively manage its cost of goods sold and maintain profitability. Additionally, Agilent’s commitment to shareholder returns is evident, having maintained dividend payments for 13 consecutive years, with a current dividend yield of 0.67% and a 4.89% growth in dividends over the last twelve months. This is a testament to the company’s financial resilience and management’s confidence in its cash flow stability, as highlighted by one of the InvestingPro Tips that Agilent’s cash flows can sufficiently cover interest payments.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which include observations on share buybacks by management and the company’s moderate level of debt. These tips, along with other real-time metrics and insights, can be found on the InvestingPro platform, offering a comprehensive toolkit for those looking to make informed investment decisions in the capital equipment sector.
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