Sector Snap: Life science tools upgraded

Barclays analyst raises life science tools rating, upgrades shares of Waters Corp., Agilent

• On 1:28 pm EDT, Monday September 21, 2009

NEW YORK (AP) -- A Barclays analyst raised his rating on the life science instrument sector Monday, saying 2010 should be a strong year due to greater demand from customers and federal stimulus funding.

C. Anthony Butler upgraded the life science enabling tools sector to "Positive" from "Neutral," and raised his rating on Agilent Technologies Inc. and Waters Corp. to "Overweight" form "Equal Weight." He believes demand from customers in the industrial market is going to improve, and said other customers will have more to spend as stimulus funds are disbursed.

"Life science tools names have disproportionate exposure to attractive academic and government research end-markets, which are poised to benefit from significant stimulus inflows over the coming years," Butler said. He named Waters and Life Technologies Corp. as his top picks in the sector.

The analyst said Waters of Milford, Mass., has the highest profit margin of any company in the sector, while Agilent, Santa Clara, Calif., will get a significant profit boost from its purchase of Varian Inc. He raised his price target on Waters shares to $65 from $55, and his target for Agilent stock to $33 per share from $25.

In afternoon trading, Agilent shares added 43 cents to $28.80, and Waters stock rose $1.06 to $56.38. Shares of Life Technologies set an annual high of $48.85, but later declined 29 cents to $48.17.

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