Waters Corporation Achieves Strong Earnings Growth, Stocks Rise
Massachusetts-based Waters Corporation (WAT) is a leading manufacturer of analytical instruments, offering innovative and sustainable solutions for laboratory-intensive sectors. With a market cap of $22.2 billion, Waters caters to a range of customers, including those in pharmaceuticals, life sciences, biotechnology, industrial fields, academia, and government, focusing on research and development, quality assurance, and various laboratory processes.
Stock Performance: A Comparison with Market Indices
Over the past 52 weeks, WAT’s shares have outperformed the broader market. The stock has surged by 38.4%, while the S&P 500 Index ($SPX) has seen a gain of 32.1%. Year-to-date, however, WAT’s stock has risen by 17.9%, trailing behind the S&P 500’s impressive 26.2% climb.
Additionally, WAT has exceeded the performance of the Health Care Select Sector SPDR Fund (XLV), which shows an 11.5% increase over the same period and a 7.2% rise year-to-date.
Q3 Earnings Results Impress Investors
On November 1, WAT shares jumped by 19.8% following strong Q3 earnings. The company reported an adjusted earnings per share (EPS) of $2.93, reflecting a 3.2% increase year-over-year, surpassing Wall Street’s estimate of $2.68. Revenue also rose to $740.3 million, a 4% improvement from the previous year and above the consensus estimate of $714.3 million. This positive performance was attributed to enhanced customer spending and successful adoption of new products. Furthermore, WAT raised its full-year 2024 EPS and revenue forecasts, boosting investor confidence.
For the current fiscal year ending in December, analysts anticipate WAT’s EPS will increase to $11.79. The company has a strong track record of surpassing earnings expectations, having done so in each of the past four quarters.
Analyst Ratings and Future Outlook
Out of 17 analysts following the stock, the consensus rating stands at “Hold,” which includes three “Strong Buy,” 13 “Hold,” and one “Strong Sell” rating. This reflects a more optimistic view compared to three months ago, where one analyst upgraded their rating to “Strong Buy.”
On November 4, Barclays maintained an “Underweight” rating on WAT but raised its price target to $360, indicating a potential downside of 7.2% from current levels. The highest price target on the street is set at $415, suggesting a modest upside potential of 6.9%. As of now, the stock is trading above the average price target of $371.87.
On the date of publication, Neharika Jain had no direct or indirect positions in any of the securities mentioned in this article. All information and data presented are solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
