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What Waters Corporation’s Valuation Trend Indicates

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Analysts’ recommendations

In September, of the 15 analysts covering Waters Corporation (WAT) stock, three have given it “strong buys,” ten have given it “holds,” and two have given it “sells” or lower. 

The mean rating for Waters Corporation stock is 2.8, and its target price is $205.79, implying an upside potential of 5.7% over its closing price of $194.69 on September 26.

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Peers’ ratings

In comparison, for peers Danaher (DHR), Stryker (SYK), and Thermo Fisher Scientific (TMO), analysts have mean ratings of 1.83, 1.93, and 1.63, respectively, and target prices of $114.07, $184.43, and $252.86, respectively.

Valuation metrics

So far in 2018, Waters Corporation stock has remained in the range of $185–$220. From its level of $218.70 on January 29, the stock corrected to $186.44 on August 15. Since then, the stock has risen to its current $195 levels in September.

Waters Corporation’s EV (enterprise value) is $13.95 billion, and its EV-to-revenue ratio is 5.86. The stock is trading at a forward PE multiple of 21.82x. Its price-to-sales ratio is 6.32, and its price-to-book ratio is 7.62.

Waters’ current ratio, a metric of how effectively a company can meet its short-term obligations, stands at 6.60. In comparison, the current ratios of its peers Danaher, Stryker, and Thermo Fisher Scientific stand at 1.50, 1.80, and 1.60, respectively, indicating that Waters is in a better position to satisfy its short-term obligations than its peers.

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