Bio Rad Has Almost 40% Upside On Revenue Acceleration And Margin Improvement, Analyst Says

RBC Capital Markets initiated coverage on Bio-Rad Laboratories Inc BIO with an Outperform rating and a $565 price target.
The analyst writes that Bio-Rad has evolved as a public company over the last eight years.
Many investors have probably overlooked the new Bio-Rad with new management, financial metrics more in line with peers, and a refreshed product portfolio.
BIO's ddPCR product line, launched in 2020, gives Bio-Rad access to the $2 billion biopharma production total addressable market where they haven't historically been present.
Additional ddPCR product launches scheduled for 2022 and 2023 will expand the addressable market.
Also see: Bio-Rad Laboratories, Qiagen Mull Merger Of Equals.
Further, the analyst writes that investors are not giving appropriate credit for the value of the company's 35% stake in the public bioproduction company Sartorius.
After lagging peers by ~300 bps before 2017, the company is now around 300 bps ahead of its competitors, targeting a 9% organic revenue CAGR from 2021-2025.
RBC analyst also notes that at 7.3x FY'23 EBITDA and 1.7x FY'23 revenue estimates, BIO trades at a 60-70% discount to peers.
Price Action: BIO shares are up 0.58% at $401.90 on the last check Wednesday.