HomeMarket NewsBernstein Expects Positive Outlook for Thermo, Revvity, Guardant, and PacBio Stocks

Bernstein Expects Positive Outlook for Thermo, Revvity, Guardant, and PacBio Stocks

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Bernstein, an investment firm, is optimistic about the future performance of medtech stocks such as Thermo Fisher, Guardant Health, Revvity, and PacBio, while finding downside potential for Illumina. In a recent industry note, Bernstein highlighted the success of the US life science tools and diagnostics sector, which has outperformed the broader market despite some recent challenges.

Factors contributing to recent weakness include post-COVID inventory de-stocking, economic issues in China, and cautiousness in biopharma spending. However, Bernstein believes these setbacks are only temporary, as the industry has historically shown strong long-term organic growth. The firm says that investors can take advantage of the current market correction to buy stocks that are expected to be long-term winners at an attractive entry point.

Bullish on Thermo Fisher and Revvity

Among diversified toolmakers, Bernstein is particularly optimistic about Thermo Fisher and Revvity. Thermo Fisher, listed on the NYSE as TMO, is expected to perform well with a price target of $603. Revvity (RVTY) is also projected to have strong growth potential, with a price target of $133.

Bernstein rated Avantor (AVTR) as market perform, suggesting that investors may need time to regain confidence following recent setbacks. Agilent (A) and Waters (WAT) were also given a market perform rating as Bernstein foresees a continued slowdown in instrument demand. The firm set price targets of $123 for Agilent and $280 for Waters.

Positive Outlook for PacBio, Bearish on Illumina

Bernstein is bullish on Pacific Biosciences (PACB) in the next-generation genomic sequencing sector. The firm believes PacBio is well-positioned to gain market share in both the long and short-read categories, and rates it as outperform with a price target of $11. However, Bernstein has a bearish outlook for Illumina (ILMN), citing increased competition and a shift away from Illumina’s main technology. Despite a significant drop in share price, Bernstein believes there is further downside potential for Illumina, setting a price target of $111.

Guardant Health and Exact Sciences Rated Outperform

Guardant Health (GH) was Bernstein’s top pick in the molecular diagnostics space. With a rating of outperform and a price target of $34, Bernstein sees Guardant Health as having a clear advantage due to being an early mover in the sector. Bernstein also sees an opportunity in Exact Sciences (EXAS), despite its relatively high valuation. The firm believes the stock’s premium is justified by the company’s lower downside risk and positive cash flow, giving Exact Sciences an outperform rating with a $83 price target.

Bernstein gave a market perform rating to Natera (NTRA), noting the company’s exciting potential, particularly in the field of minimal residual disease. However, the firm believes that the market may not fully appreciate the timeline for product development in this area. Bernstein sets a price target of $48 for Natera, cautioning investors against shorting the stock due to the potential market opportunity presented by Natera’s 22q screening.

The medtech sector continues to show promise, and investors may find opportunities in companies that have strong growth prospects and compelling valuations. Thermo Fisher, Revvity, Guardant Health, and PacBio are among the stocks that Bernstein believes are well-positioned for success in the evolving medtech landscape.

  • Thermo Fisher – Bullish, Price Target: $603
  • Revvity – Bullish, Price Target: $133
  • Avantor – Market Perform
  • Agilent – Market Perform, Price Target: $123
  • Waters – Market Perform, Price Target: $280
  • Pacific Biosciences – Bullish, Price Target: $11
  • Illumina – Bearish, Price Target: $111
  • Guardant Health – Bullish, Price Target: $34
  • Exact Sciences – Bullish, Price Target: $83
  • Natera – Market Perform, Price Target: $48

Investors should carefully consider their own risk tolerance and conduct thorough research before making any investment decisions.

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