Goldman Sachs Neutral On Bruker corp. (BRKR)

Goldman Sachs has a Neutral rating and a $18 price target on shares of Bruker corp. BRKR. In a note to clients, Goldman writes, "We hosted meetings with BRKR management yesterday that provided additional detail on (1) growth in a post-stimulus world, (2) impact from Japan, (3) and the path to margin expansion. BRKR has been a large beneficiary of global stimulus, with roughly $65mn in 2010, and management expectations for $40-45mn in 2011 and $15-20mn in 2012. BRKR believes stable funding in Germany and France and re-tailoring products to applied market customers should help offset flat NIH funding (5% of sales) and drive growth. On Japan (roughly 10% of sales), BRKR is still trying to quantify the impact of the earthquake, but noted a potential slippage of sales from 1Q to 2Q due to temporary hold-ups. Longer term, BRKR noted it could see a benefit from replacement of damaged equipment and follow-on food and water testing. Finally, with respect to margin expansion, BRKR highlighted global sourcing, product lifecycle management, and lowering R&D spend from 11% to 10% of sales as key drivers of their path to BSI OMs of 18% by 2014. However, BRKR stated that it would be difficult to achieve this 75-100bps/yr of expansion without greater than mid-single digit organic growth." Shares of BRKR gained 49 cents yesterday to close at $19.43, a gain of 2.6%.