Waters Reports Upbeat Q2 Results, Provides Outlook

Massachusetts-based analytical laboratory instrument and software firm Waters Corp. (WAT) has reported strong financial results for the second quarter of 2021. The company offers thermal analysis, mass spectrometry and chromatography solutions.

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Adjusted earnings per share (EPS) increased 24% year-over-year to $2.60, beating the Street’s estimate of $2.24. Quarterly sales grew 31% to $682 million, surpassing analysts’ expectations of $621.52 million.

During the quarter, sales into the pharmaceutical market rose 34% year-over-year; sales into the industrial market climbed 33%; and sales into the academic and government markets surged 10%. (See Waters stock chart on TipRanks)

The President and CEO of Waters, Udit Batra, said, “Our second-quarter results were led by strong growth in our pharma and industrial end-markets. Continued market strength, combined with our solid execution, resulted in double-digit growth in instrument and chemistry sales, with total sales increasing across every region.”

For the third quarter, the company expects sales growth in the range of 7% to 9%, and adjusted EPS between $2.25 and $2.35. Waters projects sales growth in the range of 13% to 15% for full-year 2021, and adjusted EPS in the range of $10.50 to $10.70.

Two months ago, Leerink Partners analyst Puneet Souda maintained a Hold rating on the stock with a price target of $550 (40.4% upside potential). The analyst had expected Waters to report EPS of $2.38 in the second quarter.

Overall, the stock has a Hold consensus based on 1 Buy, 4 Holds and 1 Sell. The average Waters price target of $371.17 implies 5.3% downside potential. Shares of the company have gained 86.5% over the past year.

According to TipRanks’ Smart Score rating system, Waters scores a 7 out of 10, suggesting that the stock is likely to perform in line with market averages.