Thursday, January 27, 2011

Waters (NYSE:WAT) EPS Leverage Stronger Than Guidance Suggests

With Waters Corp. (NYSE:WAT) expected to have significant share buybacks in 2011, Barclays sees their EPS leverage being stronger than their guidance suggest.

Barclays says, "WAT reported Q4 revenue and EPS ahead of consensus. The company is seeing strength across end markets, geographies and product categories. With increased confidence around instrument demand, in both LC and MS, we view 2011 as the year of new product momentum for WAT. We reiterate our high-conviction bullish stance...Also, with significant free cash flow expected in 2011, we believe share buybacks will provide greater EPS leverage than current guidance implies."

Barclays maintains an "Overweight" rating on Waters Corp. (WAT), which closed Wednesday at $76.66, down $1.33, or 1.71 percent. Barclays has a price target of $90 on Waters.

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