This medical testing equipment company beat last quarter’s estimates by three cents. Its shares were recently reiterated as Buy with a fair value estimate of $46.00 at Janney Capital Markets and BofA Merrill Lynch.
Agilent Technologies Inc. (A)
from Wall Street Stock Forecaster
Agilent Technologies Inc. (A) split into two publicly traded firms on November 1, 2014.
One company kept the Agilent name and stock symbol and focuses on testing equipment for medical research labs. The other firm, called Keysight Technologies, makes testing systems for electronics.
Under the spinoff, Agilent shareholders received one Keysight share for every two shares they held.
Excluding spinoff-related costs and other unusual items, Agilent earned $147 million, or $0.44 a share, in its fiscal 2015 third quarter, which ended July 31, 2015. That’s up 7.3% from $137 million, or $0.41 a share, a year earlier. Revenue was unchanged at $1.01 billion. Equipment orders fell 6.3%, to $953 million from $1.02 billion.
However, the company recently stopped making nuclear magnetic resonance spectrometers. Excluding this business and the negative impact of the high U.S. dollar on its overseas operations, revenue rose 9%, while the number of new orders gained 3%.
Agilent spends around 8% of its revenue on research, and the resulting new products will spur its growth. What’s more, the company recently enhanced its product line by purchasing Cartagenia, a Belgian firm that makes software for Agilent’s medical- testing equipment.
Agilent’s strong balance sheet will support its growth plans: its long-term debt of $1.7 billion is a moderate 14% of its market cap. It also holds cash of $2.1 billion, or $6.25 a share.
The company expects to earn $1.68 to $1.72 a share for all of fiscal 2015, and the stock trades at a reasonable 21.2 times the midpoint of that range. Agilent pays a $0.40 annual dividend.
Agilent is a buy.
Patrick McKeough, Wall Street Stock Forecaster, www.tsinetwork.ca, 888-292-0296, September 2015