Wednesday, June 24, 2015

Seeking Alpha: Newly Agile Agilent May Yet Be Weighed Down By Expectations

The life science tools market doesn't offer quite as much organic growth as many investors seem to think, but the high barriers to entry, relatively short product cycles, and consumables/service streams do tend to support good margins for the established players. The question facing Agilent (NYSE:A) isn't so much about whether the company can remain a strong player in markets like separation, mass spec, and pathology, but rather whether the company can reverse a long history of failing to live up to expectations and truly make the most of its technology and market positions.

At this point I'm a skeptic. Agilent shares may hold some appeal if you believe they can generate Waters-level (NYSE:WAT) FCF margins relatively soon, but I consider that to be a very ambitious expectation. Likewise, I'm a little concerned about the company's relatively weaker position in clinical markets next to Waters, Thermo Fisher (NYSE:TMO), Danaher (NYSE:DHR), and Bruker (NASDAQ:BRKR). Although I have little doubt that Agilent as a company will be fine, I'm concerned that there's too much optimism in the shares now that Agilent operates as a pure-play on life science and science tools.

Read more here:
Newly Agile Agilent May Yet Be Weighed Down By Expectations

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