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Evercore ISI Upgrades Waters to Outperform Based on Improved Fundamentals

NEW YORK – Evercore ISI on Tuesday upgraded Waters' stock to Outperform from a prior In Line rating and raised its target price from $315 per share to $400, citing improved fundamentals.

In a research note, Evercore analyst Vijay Kumar and his colleagues observed that the company has moved from underperforming to "growing in line with the best in class" life science tools companies, adding that they believed new CEO Udit Batra had improved "execution discipline and set in place drivers that are likely durable."

The analysts cited specifically the company's recent focus on business from contract research organizations and contract development and manufacturing organizations, areas in which they said Waters was previously "under indexed."

They also noted that the recent approval of Biogen's Alzheimer's drug aducanumab presents "an incremental" opportunity for Waters' QC business that could amount to 100 bps of revenue into fiscal year 2022, and added that they expected the company's BioAccord mass spec system would see uptake in the large molecule drug development space while its Select MRT mass spec could lead to incremental gains in the high-end mass spec market.

The Evercore analysts projected Waters to show consistent top-line growth of 6 percent or more, though they noted that a pause in the biopharma capital expenditure cycle could negatively impact the company's turnaround.

In Tuesday morning trade on the New York Stock Exchange, shares of Waters were up 1 percent at $359.71.

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