NEW YORK (GenomeWeb News) – The stocks of Agilent and Celera were upgraded today by two different analysts, but the market responded in very different ways with Agilent's shares surging and Celera's falling in afternoon trade.
Agilent's stock was upgraded to "outperform" from "neutral" by Credit Suisse analyst William Stein, who also upped his target price on the shares to $20 from $15. He cited the possibility of Agilent focusing more on its bio-analytical measurement business, which is not as susceptible to the economic downturn as its electronic measurement business, this year.
Nick Roelofs, vice president and general manager of Agilent's Life Sciences Solutions unit, recently told GenomeWeb Daily News sister publication ProteoMonitor that the firm was looking to generate a greater return on its R&D investments in the life science space.
In Monday trade on the New York Stock Exchange, shares of Agilent closed up 10 percent at $15.89.
In comparison, the Dow Jones Industrial Average soared 7 percent on the day, as investors reacted favorably to the federal government's plans to help banks remove bad assets from their books.
Meanwhile, Celera was upgraded to "overweight" from "market weight" by Thomas Weisel Partners analyst Peter Lawson, but he also lowered his 12-month price target on the stock to $10.50 from $11.50 based on current industry multiples.
Lawson said in a research note that he upgraded Celera's shares for three reasons: "Celera is the deepest value diagnostic name even after accounting for our worst-case scenario model, limited revenue risk and cap ex exposure, and a strong business model and balance sheet with cash flow breakeven and approximately $3.90 in cash/share."
He also lowered his revenue and earnings estimates for 2009 and 2010, creating a worst case scenario model, in response to some billing issues experienced in the fourth quarter at Celera's Berkeley HeartLab. The firm's new estimates for Celera include 2009 revenues of $190 million versus a previous estimate of $196 million and earnings per share of $.01, down from $.05. For 2010, Lawson estimates revenues of $210 million, down from an earlier estimate of $225 million, and EPS of $.08 from $.10.
"We believe our new estimates reduce risk in the model, and still offer compelling valuation for Celera shares," Lawson wrote.
In trade on the Nasdaq, shares of Celera closed down 4 percent at $7.71.