KeyBanc reiterates overweight rating on Waters Corp stock

On Monday, KeyBanc analysts reiterated an Overweight rating for Waters Corp stock (NYSE: WAT) and maintained a price target of $460, representing a 32% upside from the current price of $349.24. According to InvestingPro data, 13 analysts have revised their earnings upward for the upcoming period, while the company maintains strong profitability with a 59% gross margin. The analysts emphasized Waters Corp’s strategic focus on pharmaceutical and biotech manufacturing, highlighting recent developments that underscore this direction.

Waters Corp recently acquired Halo Labs, a move expected to bolster its presence in the biologics sector, which currently accounts for approximately 20% of its total revenue. The acquisition is projected to contribute around 40 basis points of growth annually in the coming years, building upon the company’s current revenue of $2.98 billion and moderate debt level.

Last Thursday, the company also launched its first line of affinity chromatography columns, specifically designed for biologic drug manufacturing. This product launch aligns with the company’s strategy, as over 30% of its revenue is now linked to products used in pharmaceutical and biotech manufacturing, including those for GLP-1s, which are anticipated to contribute 30 basis points of long-term growth. For deeper insights into Waters Corp’s financial health and growth prospects, including 8 additional exclusive ProTips, visit InvestingPro.

The analysts pointed out that India’s pharmaceutical industry, a significant market for Waters Corp, continues to grow robustly. This growth supports the company’s guidance of 5.0-7.0% organic growth in constant currency for 2025, which is considered conservative compared to its peers. Waters Corp aims for high single-digit growth during upgrade cycles, supported by its strong return on equity of 41% and healthy cash flows that adequately cover interest payments.

In other recent news, Waters Corporation (NYSE:WAT) reported its first-quarter earnings for 2025, surpassing analyst expectations with an earnings per share (EPS) of $2.25, compared to the forecasted $2.22. The company also exceeded revenue projections, reporting $662 million against the anticipated $655.33 million. Following the earnings announcement, Waters raised its full-year EPS guidance, expecting growth between 8-10%. Additionally, the company reduced its debt by $170 million, enhancing its financial position.

In analyst updates, UBS maintained a Neutral rating on Waters Corporation with a price target of $360. UBS analysts acknowledge the company’s positive growth drivers, including ongoing instrument replacements and strong pricing power, while noting that Waters’ growth may lag behind its peers. Despite these challenges, UBS expressed cautious optimism about Waters’ future financial performance.

Waters Corporation continues to focus on strategic innovations in product offerings, contributing to its competitive edge, particularly in liquid chromatography and mass spectrometry. The company remains vigilant about potential market pressures, including tariff impacts and regional uncertainties, while maintaining a prudent approach to the China market. These developments highlight Waters’ ongoing efforts to implement growth strategies and navigate a dynamic market environment.

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