Agilent Technologies (#Agilent), originally the testing and measurement equipment division of Hewlett Packard until it was sold-off as a separate business over 20 years ago in 1999, publishes its latest earnings (Q1 2021) Tuesday February 16. The company is active in the life sciences, diagnostics and applied chemical markets and for the last full trading year generated revenues of over $5.34 billion. The share price has had a stellar run, more than doubling from the lows of March last year under $60.00 to close on Friday (February 12) a few cents shy of $128.00.
Looking at Q4, Agilent Technologies earned $299.00 million, a 30.0% increase from the preceding quarter. Agilent Technologies also posted a total of $1.48 billion in sales, a 17.61% increase since Q3. Agilent Technologies earned $230.00 million, and sales totaled $1.26 billion in Q3. Q4 earnings per share (EPS) were $0.98/share, which beat analyst predictions of $0.93/share.
The market is expecting revenues of $1.43 billion for the current quarter and an EPS of $0.89/share. Interestingly, Zacks are reporting a bullish outlook for Agilent with expectations of a surprise later today¹ and EPS pushing towards $0.93/share, along with expectations at Earnings Whispers² also suggesting a beat for EPS. This is based on analysts raising estimates right before earnings — with the most up-to-date information possible — and is often a pretty good indicator of some favourable trends underneath the surface. This suggests that analysts have very recently bumped up their estimates for Agligent, giving the stock a Zacks Earnings ESP of +4.64% heading into earnings season.
Zacks conclude that “A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns” Recent upgrades have come from Goldman Sachs, who only initiated coverage of the company in December with a Buy rating and a target price of $130.00, and UBS and Cleveland Research, who both upgraded their outlook to a Buy from Neutral with a target price of $132.00 and $133.00, respectively. Of the 13 analysts currently active with Agilent, target prices range from $115.00 to $133.00, with 11 holding a Buy or Strong Buy outlook and 2 with a Hold recommendation.
Technically, Agilent Technologies remains in a strong uptrend in the higher time frame, Weekly and Monthly charts, having been above the key 20-period moving average since the break higher at the beginning of May last year, and the breach of $80.00. The Daily time frame has rallied from the January low at $118.00, through the 61.8 Fibonacci level on Thursday (February 11) at $125.00 to target the January high at $129.29. The 161.8 Fibonacci extension sits at $136.33, and the 20-day moving average at $125.00.
¹https://finance.yahoo.com/news/surprise-coming-agilent-earnings-season-142802883.html
²https://www.earningswhispers.com/stocks/a
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Stuart Cowell
Head Market Analyst
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