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Milford, Massachusetts-based Waters Corporation (WAT) crafts cutting-edge liquid chromatography and mass spectrometry (MS) systems. With an $18 billion, Waters powers labs across Asia, the Americas, and Europe, serving clinical, pharmaceutical, and environmental sectors. Its tech fuels research, quality assurance, and innovation worldwide. It is expected to announce its Q2 earnings before the market opens on Wednesday, July 31.
Ahead of the event, analysts expect Waters to report a profit of $2.55 per share, down 8.9% from $2.80 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS projection over the past four quarters. Its EPS for the last reported quarter declined by 11.2% year over year to $2.21, but exceeded the consensus estimates by 5.2%.
Looking ahead to fiscal 2024, analysts expect Waters to report an EPS of $11.84, marginally up from $11.75 in fiscal 2023. In fiscal 2025, its EPS is expected to grow 9.7% annually to $12.99.
WAT stock is down 8.1% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 15.4% gains and the S&P 500 Healthcare Sector SPDR’s (XLV) 8.4% returns over the same time frame.
WAT stock rose 1.9% on May 7 after the release of its Q2 earnings. Although the company received a positive reaction from markets, its sales declined by 7% and net income declined by 27.5% from the prior year’s quarter. The company witnessed lower sales volumes and increased expenses, which led to a drastic fall in net income. The increase in expenses has made investors jittery about its operational inefficiencies which could affect Waters’ profitability in the coming years.
On the bright side, the company has shown resilience in services sales with its revenue from services rising by 5% year over year. Additionally, the acquisition of Wyatt Technology demonstrates its vision toward expansion.
The consensus opinion on Waters stock is neutral, with a “Hold” rating overall. Out of the 14 analysts covering the stock, 13 recommend a “Hold” and one suggests a “Strong Sell” rating.
The average target price for Waters stock is $312.62, indicating a potential upside of 3.3% from current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
