Agilent stock hit a seven-month high Wednesday after putting together a strong quarterly beat that ignored the messy Covid dynamics plaguing other medtech companies.
Agilent Technologies, which makes lab research tools, reported 13% organic sales growth. That was at the high end of June-quarter reports from other life science tools companies and in line with Thermo Fisher Scientific, Evercore ISI analyst Vijay Kumar said.
But other medtech companies — like Edwards Lifesciences and Stryker — have cited headwinds around Covid, China and exchange rates for dampened results.
"Just when investors were getting a little jittery, out comes Agilent with a commanding print that obliterated nearly all worries," Kumar said in a report to clients.
On today's stock market, Agilent stock jumped 7.2% to 142.29.
Outperformance Expected For Agilent Stock
During the fiscal third quarter, adjusted Agilent earnings climbed 22% to $1.34 per share. Sales rose 8% on a strict, as-reported basis to $1.72 billion. Core growth, which discounts business development and exchange rates, was 13%.
Both measures easily beat expectations for adjusted profit of $1.20 per share and $1.64 billion in sales, according to FactSet.
"While an outperformance was expected, the magnitude of the beat was sizable," UBS analyst Elizabeth Garcia said in her note to clients. "The company was able to more quickly than anticipated reach normalized production levels at its China facility, with China reaching more than 29% growth in the quarter."
Excluding the catch-up in China after shutdowns, growth was still in the double-digit percentage range, she said. Garcia kept her buy rating on Agilent stock and raised her price target to 152 from 139.
Guidance Raised, But Prudent Fourth Quarter
Agilent also raised its core growth expectations for the year. Now, the company expects sales to increase 9.9%-10.3%. That's up from prior expectations for 8%-9% and analysts' call for 8.4%, Garcia said. The company also raised its adjusted earnings guide to $5.06-$5.08 per share.
But fiscal fourth-quarter expectations are more cautious. Agilent expects 10.3%-11.8% core sales growth. This is "more prudent forecasting given potential supply chain challenges and potential Covid-19 disruptions," Garcia said.
Evercore's Kumar kept his outperform rating on Agilent stock and boosted his price target to 145 from 136.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
