NEW YORK (AP) -- A Morgan Stanley analyst said Tuesday that shares of some life science instrument companies should continue to do well because commercial sales of their products have remained stronger than expected.
Analyst Daniel Brennan began covering the sector with an "In-Line" rating, saying the industry is less vulnerable to weak economic trends than some investors had feared. Brennan says he has a more positive opinion of companies that do a lot of business with commercial clients instead of academic ones because U.S. researchers may experience continued funding cuts.
However Brennan said the economy is helping the sector in 2012. He said the "In-Line" rating was assigned because the stocks have been climbing in 2012 after a dismal 2011.
The analyst said Agilent Technologies Inc. is his top pick in the sector, assigning the equivalent of a "Buy" rating to shares of the Santa Clara, Calif., company. He also rates shares of Waters Corp. and Thermo Fisher Scientific Inc. "Overweight," and gave "Equal-weight" ratings to shares of Life Technologies Corp., PerkinElmer Inc., Illumina Inc. and Pacific Biosciences of California Inc.
He has an "Underweight" view on shares of Affymetrix Inc., saying its growth will be weak and revenue will fall in 2013.
In afternoon trading, Agilent stock fell 64 cents to $42.14. Waters shares declined $1.76, or 2 percent, to $87.16, while shares of Thermo Fisher slipped $1 to $55.56. Affymetrix shares lost 14 cents, or 3.4 percent, to $4.11. The broader markets were all down more than 1 percent.