May 30, 2018

A – Market expectations are for record-high Uniform ROA, but management has concerns about technology, growth, and margins


 

      • Agilent Technologies, Inc. (A:USA)currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a Uniform P/E of 20.0x. At these levels, the market has bullish expectations for the firm, but management has concerns about technology, growth, and margins
      • Specifically, management may lack confidence in the sustainability of their business momentum, and may be concerned about their Captiva Enhanced Matrix Removal-Lipid technology. Furthermore, they may lack confidence in their ability to drive lower costs through their procurement initiatives, and may have concerns about the sustainability of upper-teens growth in China going forward. Moreover, they may be concerned about the internal challenges that Teva is facing, and may have concerns about declining margins in their DGG segment
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