Agilent rises on 'strong' FQ4 results and 'solid' initial FY23 guidance

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By Senad Karaahmetovic

Shares of Agilent Technologies (NYSE:A) are trading 4% in the green in pre-open Tuesday after the company reported better-than-expected FQ4 results and offered initial FY23 guidance.

Agilent reported an EPS of $1.53 on sales of $1.85 billion to beat the average analyst consensus of $1.38 on revenue of $1.76B.

“The Agilent team delivered double digit core revenue growth in each of our business groups in FY 2022. Our track record of strong execution and broad-based strength across our portfolio sets us up well as we look forward to a new fiscal year,” said Mike McMullen, Agilent president and CEO.

For this quarter, Agilent guided for an EPS of $1.30 (the midpoint), slightly below the $1.31 consensus. Revenue is seen in the range of $1.68B-$1.7B, compared to the consensus of $1.73B.

On a full-year basis, the company sees at $5.65 (plus or minus $0.04), easily ahead of the consensus of $5.43. Revenue is seen in the range of $6.9B-$7B, this time below the consensus.

BofA analysts say the initial FY23 guidance implies “solid core growth and robust margin expansion.” This prompted them to raise the price target on A stock.

“On higher estimates and an expanded peer group multiple, our new $164 PO (was $155) is now based on ~22x (was 21x) our CY23E EV/EBITDA forecast, a similar premium to the LST peer group average of ~20x (was 19x). We think this multiple is justified due to the company's strong execution, margin expansion, solid fundamentals, and share gains. Reiterate Buy rating,” the analysts said.

Wells Fargo analysts also hiked the price target as they went to $150 from $135 per share.

“Our Equal Weight rating on Agilent reflects a view that investors fairly appreciate the company's long-term opportunity to compound sales and earnings growth. F4Q22 results and FY23 guidance have mixed implications for our thesis,” they wrote in a note.