Waters Turns in Solid Q2, Faces Foreign-Exchange Headwinds in Remainder of 2022; Shares Still Rich

Wide-moat Waters reported solid second-quarter results that slightly outpaced management's expectations, despite headwinds including the China lockdown. However, Waters did not materially change its 2022 bottom-line outlook, which is being constrained by foreign-currency headwinds. At first glance, we do not anticipate changing our fair value estimate and continue to view shares as overvalued, recently trading at about 30 times forward earnings with a long-term earnings growth goal in the high-single to low-double digits.