WAT - Barclays downgrades Waters Agilent citing emerging downcycle

2023-08-01 16:12:09 ET

Barclays has lowered its ratings on life sciences toolmakers Agilent ( NYSE: A ) and Waters ( NYSE: WAT ), citing weakening demand for their products, particularly in China.

The investment bank cut its rating on Agilent to underweight with a price target of $115 and its rating on Waters to equal weight with a price target of $275.

Barclays said that the downgrades were driven largely by lack of visibility into the length and depth of the emerging downcycle for the instrument sector, which it believes "has started in earnest." It added that the Chinese market "appears to have gotten materially worse across the board."

The bank said it expects the downturn to accelerate through the balance of the year, noting that both Agilent and Waters have "significant China exposure" compared with their peers.

Barclays said it preferred Waters over Agilent in part because Waters was in the midst of an upgrade cycle, whereas Agilent just completed one. It added that several chemical companies, a key market for Agilent, have issued profit warnings this season, "suggesting demand in this segment could be depressed over the near-term."

Agilent is expected to release its quarterly earnings report on Aug. 15, while Waters is slated for Wednesday.

More on Waters and Agilent:

Waters Q2 2023 Earnings Preview

Cleveland Research downgrades Thermo, Waters, Agilent to neutral

Waters Corporation: Temporary Headwinds Present A Buying Opportunity

Agilent Technologies: Solid Operational Performance Paves The Way For The Future

Agilent Technologies: Solid Operational Performance Paves The Way For The Future

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