Waters Corporation: Hold Rating Amid High Expectations and Margin Concerns

Analyst Daniel Brennan from TD Cowen maintained a Hold rating on Waters (WAT – Research Report) and keeping the price target at $375.00.

Daniel Brennan has given his Hold rating due to a combination of factors impacting Waters Corporation’s performance. Despite the company’s impressive organic growth in a challenging market, there are concerns about high expectations and weaker first-quarter margins. Management remains optimistic about continued strong instrument growth, although their guidance suggests a slowdown attributed to a conservative outlook. Waters benefits from macroeconomic insulation, new product offerings, and strategic tariff management, yet the limited margin upside affects the earnings per share growth narrative.
While the stock experienced a sell-off, it was less severe compared to peers, indicating that high expectations played a role. The robust performance in the pharmaceutical and industrial sectors was somewhat offset by lower recurring revenue and margins that fell short of market expectations. The company’s defensive positioning and successful execution are acknowledged, but the valuation appears to leave limited room for upside, justifying the Hold rating.