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Wells Fargo Upgrades Waters to Outperform

NEW YORK (GenomeWeb) – Wells Fargo Securities today upgraded shares of Waters to a rating of outperform based on well-above-industry-average revenue growth.

Analyst Tim Evans upgraded shares of Waters from a previous market perform rating and raised the target price range to $140 to $145 from an earlier range of $125 to $130. On Tuesday Waters reported second quarter revenues of $494.7 million and non-GAAP EPS of $1.32 and raised its 2015 earnings guidance to $5.75 to $5.90 per share, up from $5.67 to $5.87 per share.

In a research note, Evans said that Waters has posted core revenue growth above the industry average for four consecutive quarters and that the key driver of this growth was its biopharma business.

"We like [Waters'] leverage to the biopharma end market, which has seen sustainably improved growth," Evans wrote. "We are comfortable with the sustainable health of this end market and believe [the company] may indeed be able to return its core revenue to a 7 to 8 percent long-term average."

Evans also noted that the firm has appointed a new CEO —Chris O'Connell formerly of Medtronic — and said that Waters may reaccelerate a new product cycle in 2016 for its thermal analysis business. Additionally, the firm seems insulated in China, he said.

In morning trading on the New York Stock Exchange Waters' shares were up more than 2 percent to $133.70.