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Waters Corp WAT

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Morningstar’s Analysis

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Waters Beats Q1 Expectations and Raises 2021 Outlook; Shares Remain Rich

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Wide-moat Waters reported outstanding first-quarter operating results that handily beat FactSet consensus, and management increased its outlook for 2021 mildly above our expectations. We may raise our 2021 expectations slightly, but at first glance, we do not expect to materially change our fair value estimate, which we just raised in February and is driven by much longer-term expectations. The shares look rich to us at roughly 30 times forward earnings for a firm that is likely to increase adjusted EPS in the low double digits in the long run.

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Company Profile

Business Description

Water sells liquid chromatography, mass spectrometry, and thermal analysis tools. These analytical instruments provide essential information on various products, such as their molecular structures and physical properties, to help clients enhance the health and well-being of end users. As a percentage of sales, Waters generates 59% from pharmaceutical customers, 30% from industrial clients, and 11% from academic/government institutions.

34 Maple Street
Milford, MA, 01757
T +1 508 478-2000
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 7,400