Wolfe Research Upgrades Waters to Outperform, Citing Growth and Attractive Valuation

Core Viewpoint - Wolfe Research upgraded Waters Corp. to Outperform from Peerperform, assigning a price target of $480, citing undervaluation relative to the company's growth and free cash flow potential [1] Group 1: Growth Potential - Waters is positioned to outperform due to above-average core growth and upside potential to its pro forma financial targets [2] - The company exhibits strong free cash flow characteristics and is supported by a highly regarded management team [2] Group 2: Valuation Metrics - Based on 2026 pro forma estimates, shares are trading at approximately 17.0x EV/EBITDA and 22.6x P/FCF, which represent discounts of about 10% and 12% respectively compared to peers [2] Group 3: Risks and Management - While there are concerns that integrating BD Life Sciences could dilute Waters' long-term organic growth and reduce premium valuation, the management's track record and diversified end-market exposure justify a higher valuation than current trading levels [3]