Agilent Technologies ( NYSE: A ) and Bio-Techne Corporation ( NASDAQ: TECH ) traded higher on Tuesday after Wells Fargo upgraded both life sciences stocks despite maintaining a negative Pharma/Biotech outlook.
The analyst Timothy Daley sees late-cycle headwinds to Pharma/Biotech outlook, given the factors such as near-term volatility in bioproduction demand, concerns about funding, and non-COVID clinical trial activities.
Despite positives in the Academic/Govt end market, the firm continues to expect the pharma/biotech to slow down in H1 2023 amid funding risks due to political concerns.
However, Daley hopes secular growth tailwinds in the Industrial/Applied outlook to further materialize amid pockets of opportunity in the environment, food, and to a lesser degree, in the cannabis space.
The analyst upgraded Agilent ( A ) to Overweight from Equal Weight, calling the Santa Clara, California-based company one of its top tools' Picks and raising its price target to $170 from $150 per share.
The analyst attributes the upgrade to the ongoing realization of growth tailwinds, prospects for multiple expansion, and attractive opportunities to improve on the firm's growth and margin forecasts.
As reasons for upgrading Bio-Techne ( TECH ) to Equal Weight from Underweight, Daley, with a $90 per share target on the stock, noted that the company's "valuations have reset to reasonable levels while long-term growth prospects remains intact."
In November, Seeking Alpha contributor Zach Bristow cited technical analysis to argue that Bio-Techne ( TECH ) has become a Buy following recent weakness.
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Agilent, Bio-Techne upgraded as Wells Fargo revises life sciences outlook