Agilent To Remain Strong (A)

Agilent Technologies A announced its 2Q10 EPS at 43 cents, beating consensus estimates of 41 cents. Consequently, Jefferies & Company has raised its FY10 EPS forecast to $1.80 from $1.68. The upgrade has been done to reflect the upside and VARI-related contribution. Agilent has recently acquired Varian Inc. VARI. Agilent’s composite BAM organic revenue growth at 12% is vastly superior to its peer performance of 6%. The company’s liquid chromatography franchise is also likely to benefit from firming replacement demand and robust new product uptake. The price target for Agilent has been increased from $40 to $42. The new price point is based on a 10-year CAP discounted cash flow model. It also is supported by a 11X EV/CY11EBITDA multiple.