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Investing.com - TD Cowen has lowered its price target on Waters Corp . (NYSE:WAT) to $322.00 from $333.00 while maintaining a Hold rating on the laboratory instrument maker’s stock. The adjustment comes as Waters trades near its 52-week low, with the stock down 23% year-to-date according to InvestingPro data.
Waters reported quarterly results on Tuesday, posting modest beats in organic revenue growth of 8% and earnings per share growth of 12%, which TD Cowen noted were largely in line with expectations. InvestingPro data shows the company maintains healthy fundamentals with a 59% gross margin and strong cash flows sufficient to cover interest payments.
The investment thesis for Waters has shifted significantly, with focus now primarily on prospects for the combined entity following the company’s planned merger with Becton Dickinson (NYSE:BDX).
During the earnings call, Waters management provided additional details on growth and synergy assumptions related to the BDX merger, which TD Cowen acknowledged as "helpful" in understanding the deal’s potential benefits.
Despite these merits, TD Cowen indicated the market may need time to appreciate the merger given Waters’ historical position as an organic growth story since its IPO, its lack of track record in executing transformative mergers and acquisitions, and uncertainty around BDX growth assumptions amid a challenging macroeconomic environment. Trading at a P/E ratio of 25.5x, Waters currently appears fairly valued according to InvestingPro Fair Value estimates. Subscribers can access 8 additional ProTips and a comprehensive analysis of Waters’ merger prospects in the Pro Research Report.
In other recent news, Waters Corporation reported its second-quarter 2025 earnings, showcasing an earnings per share (EPS) of $2.95, which slightly surpassed analyst projections of $2.94. The company also exceeded revenue expectations, reporting $771 million compared to the forecasted $748.04 million. Despite these positive financial results, Jefferies adjusted its price target for Waters, lowering it to $385 from the previous $435, though it maintained a Buy rating on the stock. Jefferies described Waters’ performance as a "solid beat," with revenue 3% above expectations and earnings per share 2% higher than anticipated, excluding tax items. These developments reflect the company’s ability to outperform forecasts, even as market reactions remain cautious.
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