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Evercore, Barclays Downgrade Waters to In-Line, Equal Weight

NEW YORK – Investment banks Evercore ISI and Barclays said Monday that they are downgrading shares of Waters, with the former moving from an Outperform to an In-Line rating and the latter from an Overweight to an Equal Weight rating.

Evercore lowered its price target for Waters shares from $285 to $270 while Barclays changed its target from $290 to $275.

Both banks cited slowdowns in spending in the Chinese and biopharma markets as the primary drivers of the downgrades.

In a note to investors, Evercore analyst Vijay Kumar said that Waters could see roughly 4 percent in incremental cuts to revenues given that it has "meaningful exposure to China and biopharma."

Barclays analyst Luke Sergott likewise said in a note to investors that "China appears to have gotten materially worse across the board" and pointed out Waters' "significant" exposure to the Chinese market.

He also noted that life science tools company earnings reports "indicate a deceleration in instrument demand, and this could accelerate through the remainder of the year."

Barclays trimmed its full-year 2023 revenue growth estimate for Waters to 0.5 percent from a prior estimate of 3 percent. It also now anticipates instrument revenues to decline by 11 percent versus a prior estimate of a 4 percent decline.

Evercore lowered its full-year 2023 earnings per share projection for Waters to $11.95, down from a previous projection of $12.61.

In Monday morning trading on the New York Stock Exchange, Waters shares were down almost 1 percent to $283.97.

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