UBS upgraded Agilent Technologies to a Buy rating from Neutral, saying the company is well-positioned for faster growth over the next few years thanks to new product launches, a rebound in Chinese demand, and solid performance in its specialty manufacturing arm.
The brokerage also raised its price target to $170 from $130, suggesting more than 20% upside from current levels. UBS said investors are underestimating how durable Agilent’s growth will be compared to its peers in the life sciences tools sector.
The firm expects Agilent’s annual sales growth to accelerate to over 6% by fiscal 2027, giving it a four-year average growth rate of about 6%, versus roughly 4.5% for comparable companies. Analysts believe that as the company delivers on these expectations, its stock should re-rate higher.
UBS pointed to recent product launches, including the null III liquid chromatography system and the Pro iQ mass spectrometer, as key drivers that should help Agilent capture renewed demand from pharmaceutical quality control and testing labs.
Another positive factor is improving biotech funding and new stimulus measures in China, a region that contributes around 20% of Agilent’s total sales. UBS said this recovery should further boost orders for lab and analytical instruments.
The analysts also highlighted Agilent’s Nucleic Acid Solutions Division, which focuses on manufacturing oligonucleotide therapeutics, as a hidden strength. Although it currently accounts for only about 5% of total revenue, UBS expects it to grow between 20% and 30% per year over the next several years.
Reflecting stronger growth potential, UBS raised its valuation multiple on Agilent to 21x estimated 2027 EBITDA from 16.5x previously, placing it at about a 17% premium to industry peers.
