U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
Investing.com - KeyBanc has reiterated an Overweight rating and $460.00 price target on Waters Corp . (NYSE:WAT), citing the company’s transformative potential following its acquisition of Becton Dickinson (NYSE:BDX)’s Biosciences and Diagnostics business. The target represents significant upside potential for Waters, which currently trades near its 52-week low of $275.05. InvestingPro data shows the company maintains strong fundamentals with a market capitalization of $17.35 billion.
The acquisition, expected to close near the end of the first quarter of 2026, marks a strategic shift for Waters, which has historically focused on organic growth and share repurchases over the past two decades.
KeyBanc projects Waters’ free cash flow to double from approximately $700 million in fiscal year 2025 to $1.4 billion by fiscal year 2027, with additional borrowing capacity estimated between $2.5 billion and $5.0 billion.
The firm expects the post-merger Waters to maintain adjusted EBITDA margins above 31% while growing at a mid-to-high single-digit rate, metrics that exceed those of industry peers.
Waters’ pro forma enterprise value to EBITDA multiple of 15.0x for fiscal year 2026 represents an 18% discount compared to Thermo Fisher Scientific (NYSE:TMO) and a 25% discount relative to Danaher (NYSE:DHR), according to KeyBanc’s analysis.
In other recent news, Waters Corporation reported its second-quarter 2025 earnings, with earnings per share (EPS) of $2.95, slightly surpassing the forecast of $2.94. The company also exceeded revenue expectations, posting $771 million against a forecast of $748.04 million. Despite these positive results, several firms adjusted their price targets for Waters. Bernstein SocGen Group lowered its price target to $360, citing slightly lighter-than-expected results, despite high growth in certain product lines. TD Cowen also reduced its target to $322, while maintaining a Hold rating, noting the company’s focus on mergers. Jefferies adjusted its price target to $385, describing the quarter as a "solid beat" with revenue and earnings exceeding expectations. These developments reflect a cautious yet optimistic view of Waters’ financial performance and strategic direction.
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