Revvity: Undervalued Mid-Growth Name with Clear Margin Expansion Path Drives Buy Rating

Analyst Daniel Brennan from TD Cowen maintained a Buy rating on Revvity and increased the price target to $124.00 from $120.00.

Daniel Brennan has given his Buy rating due to a combination of factors that, in his view, create an attractive risk‑reward profile for Revvity. He highlights that while the company’s 2026 earnings ramp is steep and weighted toward the second half, the underlying drivers—such as tariff headwinds early in the year, the timing of cost reductions, and calendar effects—make the trajectory reasonable. Brennan emphasizes that the investment case is anchored in expectations for a recovery in pre‑clinical pharma spending, continued healthy trends in diagnostics, and disciplined execution on a sizable cost‑reduction program that should materially lift margins. At a valuation of roughly 20x earnings for a business with mid‑single‑digit organic growth and a clear path toward 30% EBIT margins, he views the shares as undervalued relative to their long‑term potential.
Moreover, Brennan notes that Revvity’s guidance for 2026, including 2–3% organic revenue growth and high‑single‑digit EPS growth, is slightly ahead of market expectations and underpinned by FX and M&A tailwinds that should push reported revenue above consensus. He points out that although first‑quarter margins and EPS are guided below Street forecasts, the company’s organic growth outlook for the quarter is still better than anticipated, even after adjusting for the extra selling week. The anticipated margin pressure from tariffs, FX, and fewer selling days in early 2026 is expected to reverse as cost savings fully flow through in the second half, driving a meaningful improvement in profitability. Taken together, these factors—combined with supportive end‑market dynamics and a credible margin expansion roadmap—lead Brennan to maintain a positive stance and assign Revvity a Buy rating.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $115.00 price target.