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Investing.com -- UBS upgraded Agilent Technologies Inc. to Buy from Neutral, saying the life sciences tools maker is positioned for outsized growth driven by new product launches, improving demand in China and strength in its specialty manufacturing business.
The brokerage raised its price target to $170 from $130, implying more than 20% upside, and said investors are underestimating the durability of Agilent’s growth compared to peers.
UBS expects Agilent’s sales growth to accelerate to over 6% by fiscal 2027, giving it a four-year CAGR of about 6% versus roughly 4.5% for peers.
“As these proof points become clear, we expect the stock to rerate higher,” analysts at UBS said.
Recent instrument launches, including the null III liquid chromatography system and Pro iQ mass spectrometer, should help Agilent tap pent-up demand in pharma quality assurance and control labs.
Improving biotech funding and some stimulus measures are also lifting demand for analytical instruments in China, which accounts for about 20% of Agilent’s sales.
UBS also highlighted the company’s Nucleic Acid Solutions Division, a contract manufacturing business focused on oligonucleotide therapeutics, as an underappreciated growth driver.
The unit, which makes up about 5% of revenue, is expected to grow 20%–30% annually for several years, the analysts said.
UBS raised its valuation multiple to 21x Oct-2027 estimated EBITDA from 16.5x previously, reflecting a roughly 17% premium to peers.