On Monday, Citi reaffirmed its Buy rating for the stock and $95.00 price target for Bruker (NASDAQ:BRKR) Corporation (NASDAQ:BRKR), a scientific instrument manufacturer.
The endorsement comes as Bruker provided its revenue guidance for the year 2027, projecting revenues between $4.2 billion and $4.4 billion, with adjusted operating profit margin (OPM) between 19-20%, and adjusted earnings per share (EPS) ranging from $4.00 to $4.30.
Bruker anticipates organic revenue growth to outpace the life science tools (LST) market, which is expected to grow at 4-5%, by 200-300 basis points. The company also expects a margin expansion of approximately 280 basis points between fiscal years 2025 and 2027 and a mid-teens percentage compound annual growth rate (CAGR) for EPS in the same period.
The new guidance reflects recent acquisitions and adjusts previous targets, pulling forward revenue goals while delaying margin expansion and earnings growth due to the dilutive effects of these acquisitions. Despite these adjustments, the firm's fiscal year 2024 base guidance remains unchanged, excluding the dilution from the acquisition of NSTG.
For the second quarter, Bruker has raised its organic growth expectations from mid-single-digit to high-single-digit percentages. However, the 2025 EPS guidance has been lowered to approximately $3.10 from the previously estimated range of $3.40 to $3.70, acknowledging the near-term dilution from acquisitions.
Citi views these updated medium-term targets as largely aligned with market expectations, considering the strategic expansions and their impact on financial projections.
InvestingPro Insights
As Citi maintains a positive outlook on Bruker Corporation, recent data from InvestingPro can provide additional context for investors considering the company's stock. With a market capitalization of $10.91 billion and a P/E ratio of 27.28, Bruker is trading at a valuation that suggests investors are expecting growth. The company's revenue growth over the last twelve months, as of Q1 2024, stands at 14.49%, indicating a robust increase in sales. Moreover, the firm's gross profit margin of 50.61% highlights its ability to retain a significant portion of sales as gross profit.
InvestingPro Tips reveal that Bruker is trading at a low P/E ratio relative to near-term earnings growth, suggesting that the stock may be undervalued considering its growth prospects. Additionally, the company's cash flows can sufficiently cover interest payments, which is a positive sign for financial stability. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be explored for a comprehensive understanding of Bruker's financial health and market position. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Investors should note that while analysts have revised their earnings downwards for the upcoming period, the company is still predicted to be profitable this year and has been profitable over the last twelve months. This aligns with Citi's optimism regarding Bruker's revenue guidance and growth potential. With a total of 8 additional InvestingPro Tips available, investors have ample resources to further evaluate Bruker's investment potential.
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