Buy-side Survey_Assessing Investor Sentiment for Life Science Tools Heading into 2025

Industry and Company Overview - Industry: Life Science Tools & Diagnostics - Survey Source: J.P. Morgan survey - Respondents: 60 investors, including 43% from long-only funds and 57% from L/S funds - Geography: 90% based in the United States, 8% in Europe, and 2% in APAC Key Findings - Overall Sentiment: Cautiously optimistic with lingering concerns on China and pharma spending - Upside Potential: NTRA identified as having the greatest upside potential to consensus numbers for 2025, followed by TMO and DHR - Downside Risk: ILMN and DHR selected as having the greatest downside potential - M&A Activity: 57% of respondents expect a moderate increase in M&A activity in 2025, with 29% anticipating a more significant rise compared to 2024 - Market Growth: 42% of respondents believe the Life Science Tools market will grow +MSD in 2025, with 38% expecting +LSD growth in the instruments market - Risk Factors: China weakness and pharma spending identified as the biggest risk factors for 2025 - Long Ideas: TMO and DHR selected as top large-cap stocks to buy, with BRKR, GH, and RGEN as top mid-cap stocks - Short Ideas: ILMN, DHR, and WAT identified as top large-cap stocks to short, with TXG, RGEN, and CRL as top mid-cap stocks to short Subsector Analysis - Core Tools: Most likely to outperform in 2025, with Dental and Synbio expected to underperform - Bioprocessing: Expected to grow +MSD or +HSD in 2025, with 40% of respondents expecting +HSD growth - Instruments: Expected to grow +LSD in 2025, with 38% of respondents expecting +LSD growth Catalysts and Positioning - Catalysts: Incoming Trump Administration policies (tariffs, NIH budget, HHS and CMS confirmations, DOGE, etc.), China stimulus, and company-specific data readouts - Positioning: Mixed sentiment in the healthcare sector, with Medtech viewed as a safer spot amid uncertainty Conclusion The survey indicates a cautiously optimistic outlook for the Life Science Tools & Diagnostics industry in 2025, with investors expecting moderate growth and increased M&A activity. However, concerns remain regarding China's economic weakness and pharma spending. The survey also highlights specific companies and subsectors that investors believe will outperform in the coming year.