安捷伦科技

In its fiscal third quarter, Agilent delivered 7% core revenue growth, above its prior 4% to 6% outlook, and adjusted EPS growth of 18% to $1.62, including $0.06 in tariff refunds, but still above its prior guidance of $1.48-$1.50. Management also raised its full-year 2026 guidance.

Why it matters: Shares rose about 3% in after-hours trading on strong results and higher guidance, reflecting growing momentum at Agilent and in its end markets after several years of a tough reset period. Agilent's biggest end markets—pharma (up 12% on a core revenue growth basis), chemicals and advanced materials (up 7%), and diagnostics/clinical (up 6%)—appeared strong and offset current pressures in academia/government (down 3%). China sales even grew 9% versus a flat expectation, which represents the start of a turnaround after multiple years of weakness. Agilent raised its 2026 outlook on these strong sales and margin expansion, including about 6% core revenue growth, or 65 basis points higher at the midpoint, and $6.18-$6.21 adjusted EPS, or about 11% growth and $0.15 above its prior view at the midpoint.

The bottom line: Our expectations are already within the new sales guidance, but after raising near-term margin expectations and accounting for recent cash flows, our fair value estimate has risen to $167 per share from $159 previously. Shares now look about fairly valued after rising substantially in recent months on growing momentum at wide-moat Agilent and its end markets. Specifically, we still see positive catalysts on the horizon, including an instrument replacement cycle that could be enhanced by reshoring efforts in biopharmaceutical and semiconductor manufacturing in 2027 and beyond. Also, Agilent and its life science peers may be among the few nontech beneficiaries of artificial intelligence initiatives, which could boost volume growth in biopharma and semiconductor applications that use Agilent's tools over the long run.

BLANK PAGEFor more details specifically on the life science industry's recent history and potential profit growth catalysts in one of the moatiest parts of this industry where Agilent excels, please see our research, "After a Long Reset Period, Life Science Stocks Look Set to Rebound."

We are increasing our fair value estimate for Agilent by 5% to $167 per share from $159 per share to reflect stronger near-term profit assumptions, driven primarily by rising margins and cash flows generated since our last valuation change.

Overall, we appreciate that Agilent's results are returning to more normalized growth patterns in fiscal 2026, and we see positive catalysts on the horizon related to planned reshoring efforts by its biopharmaceutical clients and reinvestments on pandemic-era instruments that are reaching the end of their lifespans. These catalysts could accelerate Agilent's profit growth primarily in the 2027-30 timeframe. But similar to the post-pandemic reset that we have seen since late 2022, we think there may be a significant reset period after that period, as well. So although we think Agilent's growth can accelerate further than we previously thought through 2030, our 10-year expectations look roughly in line with more typical demand trends in Agilent's end markets. For example, through 2035, we expect revenue growth of 5% compounded annually, or within management's 5% to 7% core revenue growth target. With some margin expansion and share repurchases, we think adjusted EPS should grow even faster, and we project 9% adjusted EPS growth compounded annually through 2035, excluding any unannounced acquisitions.

We believe a wide moat surrounds Agilent’s analytical instrument business, consisting primarily of chromatography (gas and liquid), mass spectrometry, and other testing tools. Intellectual property and ongoing innovation create an intangible asset moat source while regulatory and reproducibility factors contribute to switching costs for end users. Both moat sources are crucial to Agilent’s ongoing advantages in its target markets, and Agilent enjoys strong returns on invested capital including goodwill well above capital costs.

Intangible Assets

Agilent offers differentiated technology that is protected by various intangible assets, including patents, copyrights, and trademarks. This portfolio of intellectual property and its innovation prowess in chosen fields keep competitors from directly copying its technology. Since even slightly differentiated technical features can cause an end user to prefer one tool over another similar tool in Agilent’s precise scientific end markets, we see intangible assets around its differentiated technology as a significant moat source. The differentiated properties of Agilent’s tools affect the performance, accuracy, and speed of the various research projects they enable, and differentiated product features create intangible assets that inform decisions to use those tools in specific applications, particularly at the beginning of a project. In order to remain relevant to scientists in early project phases, Agilent must continue to innovate, and we believe its ongoing innovation also contributes to its intangible assets in this business. Agilent has significant incentive to develop new products that contribute to positive mix benefits, although it enjoys some like-for-like pricing power as well.

Switching Costs

Analytical Instruments

After the initial choice of tools based primarily on intangible assets, Agilent benefits from substantial switching costs in most of its end markets. For example, over 35% of Agilent’s revenue is generated from the development and manufacturing of biopharmaceuticals, which is an extremely sticky business. In this end market, Agilent’s analytical tools are critical components of the production methods for various drugs, which are specified directly in each molecule’s regulatory approval application. Regulators require the same production method throughout a drug’s lifecycle, and any changes to the manufacturing process, including the quality assurance and quality control tests often performed on Agilent’s tools, would require time, money, and additional regulatory scrutiny to reopen a drug’s application to receive approval from regulators to change that process. Those regulatory requirements, as well as reproducibility concerns such as employee training and learning curves, create highly durable switching costs for biopharmaceutical customers that result in a very long potential benefit period for Agilent in this highly regulated market. For branded small molecules, that period can last up to 20 years from discovery until patent expiration. For large molecules (or biologics), that period can last even longer due to their difficult-to-duplicate manufacturing processes. Also, once a drug’s key patents expire, generic and biosimilar manufacturers often seek to mimic the same production methods that were used by the branded manufacturer to reduce product variability, and that adoption by generic and biosimilar manufacturers can create an even longer benefit period for Agilent on a specific molecule.

We see narrower, but still strong, moats around Agilent’s analytical instruments that are used in other less regulated end markets, and we think intangible assets and switching costs, primarily around the long useful life of equipment, support Agilent's moat in most of those end markets, as well. For example, Agilent leads the market in gas chromatography tools that are often used in the chemicals and advanced materials end markets. Agilent generates about triple the revenue of its closest peer in gas chromatography products, and we believe its differentiated technology, strong reputation, and innovative capabilities create an intangible asset advantage in gas chromatography in particular. Also, Agilent’s gas chromatography instruments have very long useful lives around 10 years, and those long lives contribute to the durability of Agilent’s economic profits even outside the highly regulated biopharmaceutical end market. Specifically, while a customer uses these instruments, Agilent should generate recurring consumable and service revenue, and we believe other switching costs persist due to training and workflow productivity concerns for end users in these highly specialized applications, which has led to very stable market shares in gas chromatography, especially.

Diagnostics

Agilent’s remaining diagnostics business also has advantages with intangible assets associated with its differentiated testing platforms along with some switching costs. In this division, Agilent’s tools primarily help clinicians diagnose and then develop therapeutic plans for patients with a concentration in oncology indications. Through its 2012 acquisition of Dako, Agilent enjoys a top-tier position in the anatomical pathology market for tissue-based cancer diagnostics. Relative to the broader diagnostics market, the company’s installed instrument base in this business and related consumable sales make this a decent specialty segment where pathologists perform sophisticated and time-consuming tests. Overall, we think this division’s solid prospects combined with intangible assets and the switching costs associated with its large installed base contribute to Agilent’s competitive advantages.

Agilent's innovation engine and cost control efforts have been on display through strong growth and margin expansion since spinning out its electronic measurement business Keysight in November 2014.

As a well-established leader in many of its core markets, regulatory concerns and customer familiarity with Agilent’s instrumentation and services can make market share gains for competitors difficult.

Agilent continues to increase its exposure to the sticky biopharmaceutical end market, including recent acquisitions in the emerging cell analysis field.

Due to its dependence on one-time sales and its exposure to some cyclical end markets, Agilent's financial results may weaken during uncertain times.

Problems in the Chinese market, which represented 18% of Agilent's sales in fiscal 2025, can be more pronounced than for other life science players that typically only generate a low-double-digit to midteens percentage of sales in that country.

Agilent's appetite for acquisitions adds some uncertainty around the magnitude of its economic profitability in the long run.