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Shares of scientific-instrument maker Agilent Technologies ( A ) popped to a 15-year high above 45 in early trading Tuesday after the company beat fiscal Q2 estimates and raised guidance late Monday. The 16% earnings growth and 6% top-line growth were the highest since Q1 2012, and a vindication of CEO Michael McMullen’s strategy since he attained his position just over a year ago, according to Evercore ISI analyst Ross Muken. “We see Mike’s vision of superior top-line growth, an inflection in operating margins and improved free cash flow/deployment as a differentiating factor vs. LST (life-science tools) peers going forward,” Muken wrote in a research note, raising his price target to 48 from 43 while affirming a buy rating. Agilent’s peers include Thermo Fisher Scientific ( TMO ) and Danaher ( DHR ). Leerink analyst Dan Leonard raised his price target to 51 from 44 while keeping an outperform rating. He noted that in addition to lifting its organic-growth guidance for this year to 4.5%, the company had offered a glimpse into next year. “Management offered an initial view of fiscal 2017, projecting 4.5% organic revenue growth, and reiterated its commitment to target 22% operating margins,” Leonard wrote. “Assumptions for growth include continued momentum in biopharma and China, which are expected to sustain throughout the second half of 2016 and full-year 2017, and the C&E (chemical & energy) market bottoming out by year-end.” Agilent stock early Tuesday hit its highest point since January 2001, at 45.34, though in afternoon trading it was up just 2.5%, near 44. The move broke the stock out of a consolidation that had been going for over a year. The stock’s Relative Strength and Accumulation/Distribution ratings have both been improving over the last couple of weeks, reaching 82 and B, respectively, both well above average. Scalper1 News
Scalper1 News