Agilent Earnings: Cash Flows Soar Even as China Weakness Constrains 2024 Outlook

Wide-moat Agilent delivered fourth-quarter results that were better than management's targets but reflected weakness in the typically robust biopharma end market in China. Management expects those challenges to continue but not deteriorate further in fiscal 2024, and its initial outlook for revenue and adjusted EPS looks moderately below our previous view. At first glance, we do not anticipate changing our $151 fair value estimate, though, considering much higher than expected cash flows recently. Also, Agilent's long-term prospects remain intact, and Agilent shares continue to look moderately undervalued to us.