PerkinElmer Reports Upbeat Q2 Results; Signs Deal to Acquire BioLegend

PerkinElmer (PKI) has reported second-quarter results that surpassed the Street’s expectations, driven by impressive growth in revenues during the quarter. The company provides solutions to diagnostics, life science, food, and applied markets.

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Quarterly revenues came in at $1.23 billion, which surpassed the estimates of $1.12 billion, and increased 51% from $812 million a year ago. Growth was witnessed in the company’s Discovery & Analytical Solutions and Diagnostics segments.

The company reported adjusted earnings of $2.83 per share, higher than $2.42 per share estimated by analysts. Notably, it compares favorably with $1.57 recorded in the same quarter last year. (See PerkinElmer stock charts on TipRanks)

The President and CEO of PerkinElmer, Prahlad Singh, said, “Underpinned by the strategic pillars we highlighted at our recent Analyst Day and now the exciting addition of BioLegend, PerkinElmer is well-positioned to execute on both our near- and long-term goals.”

PerkinElmer expects to report adjusted revenues of about $1 billion and adjusted earnings of $1.62 per share in the third quarter. Also, for 2021, the company seeks to deliver adjusted earnings of $9.88 per share with adjusted revenues of $4.57 billion.

BioLegend to Be Acquired for $5.25B

Alongside Q2 results, PerkinElmer announced that it has struck a deal to acquire BioLegend for $5.25 billion in cash and stock. The transaction is expected to close by the end of 2021, subject to regulatory approvals and other customary closing conditions.

With this deal, PerkinElmer will be able to expand its life science franchise. Also, PerkinElmer’s campus in San Diego will be turned into a global Center of Excellence (CoE) for research reagent content development for the combined company.

The acquisition is anticipated to be accretive to PerkinElmer’s revenues and margin profile. Also, about $0.30 of adjusted earnings per share accretion is expected in the first full year, following the deal completion, and over $0.50 in the second year.

Furthermore, the combined company will witness immediate revenue synergies, which are expected to reach $100 million annually by the fifth year.

Street Says Buy

In an investors note last month, Robert W. Baird analyst Catherine Ramsey Schulte reiterated a Buy rating on the stock with a price target of $150 (8.7% downside potential).

Schulte noted, “PKI’s core business momentum seems strong, with increasing exposure to high-growth markets and higher recurring revenue mix, and we continue to see opportunities for incremental capital deployment.”

The rest of the Street is optimistic about the stock with a Strong Buy consensus based on 4 Buys and 1 Hold. The average PerkinElmer price target of $156.80 implies 4.6% downside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on PerkinElmer with 16.4% of investors, who have their portfolio on TipRanks, increasing their exposure to PKI stock over the past 30 days.