A - Agilent Technologies: Cash Flow Returns On Investments And Conventional All Point To A Hold

2024-03-12 02:16:20 ET

Summary

• Agilent has reshuffled its portfolio and increased economic returns, but growth is expected to be sluggish, and the upside may be limited.
• The company provides life sciences, diagnostics, and applied chemicals products to various industries.
• Agilent is a quality company and has demonstrated strong financial performance, improving margins, and efficiency, but its valuation suggests limited upside potential.
• We initiate with a hold rating.

We initiate Agilent ( A ) with a hold rating. The company has managed to reshuffle its portfolio and significantly increase its economic returns over the past decade. Revenue per share has also grown at a respectable 7.5% CAGR since the spinoff of Keysight Technologies and the disposal of its nuclear magnetic resonance business in 2014. However, with growth expected to be sluggish going forward, and a high FY24 PE of 27x, we believe the upside may be limited....

For further details see: