Company Reports

We maintain our $162 fair value estimate for narrow-moat Revvity, given that its soft first-quarter result was largely as anticipated. Revenue declined 4% year over year on continued macroeconomic pressure in key end markets and a tough comparable period. We slightly lowered our top-line growth assumption for full-year 2024 to about 2%, near the midpoint of management's updated guidance, based on a pickup in demand from life sciences clients in the second half of 2024. This top-line adjustment is partially offset by cash flows generated since our last update, leading to our reaffirmed valuation. Shares still look undervalued.

With myriad acquisitions in the past few years, Revvity (formerly PerkinElmer) has been in a constant state of evolution since 2016 when the company made the transition into two new business segments, diagnostics and discovery and analytical solutions, or DAS. With the recent divestment of its Applied, Food, and Enterprise Services business in early 2023, the company is operating under a new name and will focus solely on the life sciences and diagnostics business. We believe the firm's renewed strategic focus on improving its diagnostic product mix and life sciences business will maintain returns over cost of capital and produce tangible benefits for shareholders in the long run.

Narrow-moat Revvity delivered full-year 2023 results that were slightly better than anticipated, due to a solid fourth-quarter performance amid continued industry headwinds. We expect weaker demand from biopharmaceutical customers and challenging macroeconomic conditions to carry on into the first half of 2024. As a result, we slightly lower our prior full-year 2024 revenue assumptions to be more in line with management’s guidance of 1% to 3% growth. The stronger 2023 result and weaker 2024 expectations largely offset in our model, so we retain our $162 fair value estimate. At current prices, shares remain undervalued relative to our maintained valuation.

Our $162 fair value estimate remains intact for narrow-moat Revvity, even as soft demand weighed on its third-quarter results and near-term outlook. Management again lowered full-year 2023 revenue and adjusted EPS forecasts on softer spending by biopharmaceutical clients that will likely persist through the first half of 2024. The moderate updates we made to our full-year 2023 revenue growth assumptions, in line with updated guidance and reflecting recent headwinds, were roughly offset by cash flows generated since our last valuation update, though, resulting in our unchanged valuation. With shares down over 15% on these weak results and guidance, we continue to highlight Revvity as significantly undervalued and continue to view the firm's long-term outlook as strong, despite its weak near-term prospects.

Revvity's weak second quarter came in about as expected, even when including continued slowing of demand by biopharmaceutical customers in China that weighed on revenue growth. The prolonged impediment to topline performance increases uncertainty heading into the second half of 2023 and caused management to slightly decrease full-year guidance from prior projections (down 3% at the midpoint for both revenue and adjusted earnings per share). We have slightly reduced our full-year forecasts to reflect that uncertainty, roughly in line with updated guidance, but those changes did not materially affect our $162 fair value estimate, which is based on longer-term assumptions for the narrow-moat firm. Shares remain moderately undervalued at current prices.

With myriad acquisitions in the past few years, Revvity (formerly PerkinElmer) has been in a constant state of evolution since 2016 when the company made the transition into two new business segments, diagnostics and discovery and analytical solutions, or DAS. With the recent divestment of its Applied, Food, and Enterprise Services business in early 2023, the company is operating under a new name and will focus solely on the life sciences and diagnostics business. We are confident that the firm's renewed strategic focus on improving its diagnostic product mix and life sciences business will maintain returns over cost of capital and produce tangible benefits for shareholders in the long run.

Narrow-moat Revvity (formerly known as PerkinElmer) reported weak first-quarter results that were about as expected but trimmed its guidance for the full year, which appears to be pushing down shares in early trading. At first glance, our bottom-line assumptions remain within management's new guidance range, and we do not anticipate changing our $162 fair value estimate based on this announcement. The shares still appear moderately undervalued to us.

Narrow-moat PerkinElmer reported fourth-quarter results that slightly exceeded expectations, but its guidance looks weak for 2023, as demand from pandemic-related products will dissipate in a more endemic situation. We have made slight adjustments to our projections to account for a complete removal of COVID-19-related sales and slowing demand affecting 2023 guidance, but we are maintaining our $162 fair value estimate. Shares still appear undervalued, and investors should note that PerkinElmer is on track to fully divest its analytical and enterprise business in the near future.

Narrow-moat PerkinElmer reported slightly better-than-expected third-quarter results in its non-COVID-19 operations, which allowed management to maintain its full-year outlook. The company was also able to maintain decent margins despite macroeconomic headwinds as it leveraged volume and pricing increases while also controlling costs. PerkinElmer remains on track to successfully execute the planned divestiture of its analytical, food, and enterprise service business to New Mountain Capital by the first quarter of 2023. We are maintaining our $162 fair value estimate and believe the shares are moderately undervalued.

With myriad acquisitions in the past few years, PerkinElmer has been in a constant state of evolution since 2016 when the company made the transition into two new business segments, diagnostics and discovery and analytical solutions, or DAS. With the announcement of the divestment of its Applied, Food, and Enterprise Services business planned for early 2023, the company will operate under a new name and will focus solely on the life sciences and diagnostics business. We are confident that the firm's renewed strategic focus on improving its diagnostic product mix and life sciences business will maintain returns over cost of capital and produce tangible benefits for shareholders in the long run.

Narrow-moat PerkinElmer reported consistent second-quarter earnings and better-than-anticipated noncoronavirus revenue contributing to a higher outlook by management for the year. Although management's guidance is not far off from our projections, the announced divestiture of the analytical, food, and enterprise service businesses to New Mountain Capital will likely cause a mid-single-digit percentage change in our fair value estimate. The company will likely have higher revenue growth and better margins moving forward, which will be reflected in our new valuation.

Narrow-moat-rated PerkinElmer reported better-than-anticipated operating results in the first quarter that contributed to a higher outlook for the full year. At first glance, that new outlook is not far off our expectations for the year, and we are maintaining our $144 fair value estimate. We believe the shares are still slightly overvalued.

Narrow-moat-rated PerkinElmer reported fourth-quarter results slightly topping previously reported guidance. We believe shares are overvalued, and there are no changes to our fair value estimate of $144 even after management raised its outlook for 2022, as strong demand for COVID-19 products are anticipated through the first quarter of 2022.

After taking a fresh look at PerkinElmer, we raised its fair value estimate to $144, from $131 previously, and maintained our narrow moat rating and stable moat trend. PerkinElmer operates under two business segments, Diagnostics and Discovery and Analytical Solutions. Each segment is characterized by the sale of instruments, tests, services, and software solutions to the pharmaceutical, biomedical, chemical, environmental, and general industry markets.

With myriad acquisitions in the past few years, PerkinElmer has been in a constant state of evolution since 2016 when the company transitioned into two new business segments, Diagnostics and Discovery and Analytical Solutions (DAS), with life sciences being the most attractive segment of the DAS business. We are confident that the firm’s renewed strategic focus on improving its diagnostic product mix and life sciences business will sustain returns over cost of capital and produce tangible benefits for shareholders in the long run.

Narrow-moat PerkinElmer reported strong third-quarter operating results, and although management raised guidance again, we do not anticipate changing our fair value estimate at first glance even as we plan to adjust our near-term assumptions. We still view the shares as overvalued, although we recognize that the company outperformed management’s expectations and FactSet consensus in the third quarter, driven by both COVID-19- and non-COVID-related sales.

Narrow-moat PerkinElmer reported strong second-quarter results that beat expectations, and management raised its outlook for 2021 again. On recently generated cash flows and strong near- and long-term prospects, we're raising our fair value estimate to $131 per share from $106 previously. Our new fair value incorporates the planned BioLegend acquisition that was also announced July 26 but still remains below market prices.

With myriad acquisitions and divestitures in the past decade, PerkinElmer has been in a constant state of evolution. While its medical imaging divestiture and structural changes historically constrained margins, we are confident that the firm’s renewed strategic focus on improving its diagnostic product mix and life sciences business will sustain returns over cost of capital in the long run. PerkinElmer's competitive positioning has certainly shifted for the better, and with several attractive avenues of growth within reach, particularly in emerging markets, we believe the firm will produce tangible benefits for shareholders for the next several years.

Narrow-moat PerkinElmer reported strong first-quarter results, delivering overall revenue of about $1.3 billion, beating our and FactSet consensus expectations on the top and bottom lines. Unsurprisingly, the company experienced another quarter of solid growth, nearly up 100% from 2020, mainly driven by the ongoing demand for its COVID-19-related testing solutions. We are maintaining our narrow moat rating and $106 fair value estimate.

With myriad acquisitions and divestitures in the past decade, PerkinElmer has been in a constant state of evolution. While its medical imaging divestiture and structural changes historically constrained margins, we are confident that the firm’s renewed strategic focus on improving its diagnostic product mix and life sciences business will sustain returns over cost of capital in the long run. PerkinElmer's competitive positioning has certainly shifted for the better, and with several attractive avenues of growth within reach, particularly in emerging markets, we believe the firm will produce tangible benefits for shareholders for the next several years.