Now that most of its huge restructuring initiatives have been completed, Agilent Technologies (A) has seen a nice stock price appreciation. We looked into Zacks senior technology analyst Ken Nagy, CFA's latest report to see why he is keeping his Hold rating on the shares:
Agilent Technologies is a broad-based OEM [original equipment manufacturer] of test and measurement equipment. January quarter revenue exceeded consensus estimates, while the EPS [earnings per share] was in-line. Both orders and revenue were down, although results were strong considering the weak seasonality. The forward guidance was for a 2-5% revenue increase in the second quarter.
With most of the restructuring activities behind it, both revenue and margins look set to post record growth. The accelerated share repurchase and Stratagene acquisition has resulted in a buoyant share price. We believe the current valuation is fair. Consequently, we are reiterating our Hold rating on Agilent shares.
Agilent has completed a massive restructuring. The company carved out units with significant exposure to the semiconductor, semiconductor manufacturing and telecommunications equipment sectors. Management feels that this will reduce the volatility of financial results, thus causing an improvement in the market valuation of the company. The stock price moved roughly 25% higher when the restructuring and financial engineering was announced.
Read the analyst report on A