Bruker stock falls 12% after $600M convertible offering, TD Cowen maintains Hold

Investing.com - Bruker (NASDAQ:BRKR) shares fell 12% after the company announced a $600 million mandatory convertible preferred stock offering, prompting TD Cowen to reiterate its Hold rating and $40.00 price target. According to InvestingPro data, the stock has declined over 49% year-to-date and is currently trading near its 52-week low of $28.53.

The scientific instruments maker’s stock dropped to five-year lows following the announcement, with TD Cowen noting that arbitrage-related trading likely contributed to the weakness. The firm indicated that despite the negative market reaction, the offering appeared necessary to reduce leverage, gain balance sheet flexibility, and maintain debt covenants. InvestingPro analysis suggests the stock is currently undervalued, with a Financial Health Score rated as "FAIR" and strong revenue growth of 10.4% over the last twelve months.

TD Cowen expressed a "growing more positive" bias on Bruker despite maintaining its Hold rating, citing the company’s strong product offerings, proteomics orientation, and normalized growth profile against current valuation levels. The company maintains a healthy gross profit margin of 49% and is expected to remain profitable this year, according to InvestingPro analysis, which offers additional insights through its comprehensive Pro Research Report.

The research firm identified National Institutes of Health (NIH) funding as a key risk factor, noting that Bruker derives approximately 10% of sales from U.S. academic and government customers, with NIH accounting for about 7% of total sales.

Recent Congressional appropriations point to a potentially flat NIH budget in fiscal 2026, which TD Cowen characterized as "better than expected and a clear positive," though uncertainty remains about the final budget outcome and other NIH funding dynamics.

In other recent news, Bruker Corporation announced the pricing of a $600 million public offering of Mandatory Convertible Preferred Stock. The offering consists of 2.4 million shares with a liquidation preference of $250 per share and is expected to close around September 8. The proceeds from this offering will be used to strengthen Bruker’s balance sheet by repaying debt, including a term loan due December 2026 and borrowings under its 2024 revolving credit agreement. Additionally, Bruker plans to repay a portion of its term loan due March 2027. In another development, Bruker’s Board of Directors has approved a quarterly cash dividend of $0.05 per share, payable on October 3, 2025, to stockholders of record as of September 23, 2025. Meanwhile, TD Cowen has lowered its price target for Bruker to $40 from $47, maintaining a Hold rating due to weak demand and reduced 2025 guidance. These recent developments provide significant insights into Bruker’s financial strategies and market expectations.

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