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Agilent's Guidance 'Still Feels Conservative' To Wells Fargo

Agilent Technologies Inc A 4.19% reported better-than-expected quarterly results and raised its FY16 guidance by $0.06 at the midpoint on a combination of forex and core operations. Wells Fargo’s Tim Evans maintained a Market Perform rating for the company, while raising the valuation range from $43-$44 to $44-$45.

Strong Performance And Conservative Guidance

Agilent’s robust performance was driven by the continued strength in its Pharma business, which grew 14 percent, and 25 percent growth in its Food business. Exceptional growth in China, better order-to-revenue conversion and strong demand in key end markets were the other factors that drove Agilent’s strong results, analyst Tim Evans noted.

The company raised its FY16 revenue and EPS guidance by $60 million and $0.06 at the midpoint to $4,160-$4,180 million and $1.88-$1.92, respectively. Agilent expects its FY17 revenues to grow 4.5 percent on an organic basis, driven by new product launches, slated for the back half of FY16, continued growth in China and the bottoming out of weakness in the chemical and energy segments by the end of FY16.

Evans believes that Agilent’s revenue growth guidance for both FY16 and FY17 is conservative, given its strong recent performance.

The EPS estimates for FY16 and FY17 have been raised from $1.88 to $1.90 and from $2.14 to $2.16, respectively.

May 2016Goldman SachsMaintainsBuy
Feb 2016Bank of AmericaMaintainsEqual-weight
Feb 2016BairdMaintainsOutperform

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