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Qiagen Earnings: 2023 Outlook Intact Even as Reset Continues

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Qiagen’s QIA third-quarter results mildly exceeded expectations, even when considering the significant COVID-19-related declines versus a tough comparable period in 2022. Positively, management maintained its 2023 guidance, despite headwinds faced by the life science and diagnostic industry. At first glance, we do not anticipate changing our fair value estimate, which remains moderately above recent trades. Also, while our moat rating remains none, we recognize that Qiagen’s operations have improved substantially in recent years even when excluding COVID-19-related demand, and we expect Qiagen to remain economically profitable throughout our five-year forecast period.

In the quarter, Qiagen’s sales and adjusted EPS exceeded management’s previous guidance. In constant currency, sales declined 6% to $470 million (above its previous goal of at least $465 million), including a 60% decline in COVID-related sales. COVID-related sales appear to be hitting a bottom in 2023, though, which bodes well for the future driven primarily by non-COVID trends including 5% growth in the quarter. In non-COVID sales, diagnostics led the way with particularly strong QuantiFERON tuberculosis diagnostic tests while life science tools retreated a bit. Similar to total sales, adjusted EPS fell by mid-single digit percentage in the quarter, although adjusted EPS of $0.50 exceeded management’s previous expectation for $0.48.

Looking forward, though the life science and diagnostic industry continues to reset in 2023, Qiagen was able to maintain its most recent guidance for 2023 of at least $1.97 billion of sales and at least $2.07 of adjusted EPS in constant currency. Our near-term expectations remain roughly in line with that. While management did not communicate 2024 guidance specifically, we suspect that that China will remain challenging through mid-2024 while other geographies could start improving before then, assuming biopharmaceutical end markets revert to more normalized demand patterns.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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Julie Utterback

Senior Equity Analyst
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Julie Utterback is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. Within the healthcare industry, she covers medical technology and service companies. She is also the chairperson of the equity research team’s capital allocation methodology.

Utterback joined Morningstar in 2005 as an equity analyst in the healthcare industry. At that time, she covered medical technology companies, including orthopedic device, medical equipment, and cardiac device firms. In 2010, she joined Morningstar's credit research team, initiating coverage of the entire healthcare industry and generally helping the organization expand and maintain its credit coverage across many industries. She held that senior credit analyst role until April 2019, when she returned to the equity team to cover medical technology and service companies.

Prior to joining Morningstar, Utterback was an equity analyst at State Farm Insurance for several years. She holds a bachelor's degree in finance from the University of Illinois Urbana-Champaign. She also holds the Chartered Financial Analyst® designation.

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