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Investing.com - TD Cowen has reduced its price target on Waters Corp . (NYSE:WAT) to $333.00 from $375.00 while maintaining a Hold rating on the stock. The adjustment comes as Waters trades near its 52-week low of $287.02, having declined over 17% in the past week. According to InvestingPro data, the company maintains a GOOD financial health score, with strong cash flows and moderate debt levels.
The firm’s adjustment comes as investors focus on Waters’ quarterly performance in the context of what TD Cowen describes as a "transformative BDX deal."
TD Cowen sees potential upside in the quarter, with organic growth possibly reaching the higher end or slightly exceeding the company’s 5-7% organic growth guidance for Q2.
The firm identified several growth drivers, including PFAS, a $10 million chemistry pull-forward related to pharmaceutical tariffs, and continued LC-MS replacement in large pharmaceutical companies.
The new price target is based on a 16x EV/forward pro-forma EBITDA multiple, with TD Cowen noting that positive quarterly results would likely be well-received following the stock’s steep sell-off after the deal announcement.
In other recent news, Waters Corporation announced a definitive agreement to merge with Becton Dickinson (NYSE:BDX)’s biosciences and diagnostic units through a $17.5 billion Reverse Morris Trust transaction. The merger, expected to close by the end of the first quarter of 2026, will result in Waters holding a 60.8% share of the combined entity. This deal is projected to double Waters’ total addressable market to approximately $40 billion, with anticipated annual growth of 5-7%. Analysts have shared mixed reactions: Bernstein maintained an Outperform rating with a $400 price target, while UBS and BofA Securities held Neutral ratings with price targets of $360 and $330, respectively. Stifel also reiterated a Hold rating, noting that the acquisition adds complexity to Waters’ investment thesis. The transaction is expected to be accretive to Waters’ adjusted earnings per share in the first year, with projected mid-teens annualized EPS growth over five years. Waters plans to achieve $345 million in annualized EBITDA synergies by 2030, including $200 million in cost synergies within three years. The merger’s completion is contingent on regulatory and shareholder approvals.
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