Waters Corporation: Strong Q2 Performance Overshadowed by Future Uncertainties and BDX LS Deal Concerns

Analyst Michael Ryskin of Bank of America Securities reiterated a Hold rating on Waters, retaining the price target of $330.00.

Michael Ryskin’s rating is based on Waters Corporation’s solid second-quarter performance, which included an 8% organic sales growth and adjusted earnings per share slightly surpassing expectations. However, concerns remain regarding the company’s future prospects, particularly with the uncertainties surrounding the fiscal year 2025 projections and the BDX LS deal.
The company’s margins were impacted by unfavorable geographical sales mix and one-time manufacturing relocation costs, which tempered the positive results from the Chemistry segment. Additionally, while the growth in China was strong, the company remains cautious about future growth and the impact of economic stimulus. The ongoing skepticism about the BDX LS acquisition and its potential synergies also contributes to the Hold rating, as investors await more clarity and results from this deal.