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Inside Agilent’s Newly Added Risk Factors

California-based Agilent (A) is a global supplier of instruments, software, and services to the life sciences, applied chemical, and diagnostics markets.

The company reported a 12% year-over-year increase in revenue to $1.66 billion for Fiscal Q4 2021 ended October 31, in line with the consensus estimate. It posted adjusted EPS of $1.21 versus $0.98 in the same quarter last year and beat the consensus estimate of $1.17.

For Q1 2022, Agilent anticipates revenue in the band of $1.64 billion to $1.66 billion, implying year-over-year growth of 7.2%. It expects adjusted EPS in the range of $1.16 to $1.18. For full-year Fiscal 2022, the company expects revenue in the range of $6.65 billion to $6.73 billion. It estimates adjusted EPS of between $4.76 and $4.86.

Agilent plans to distribute a quarterly cash dividend of $0.21 per share on January 26 and has set an ex-dividend date of January 3. Agilent stock currently offers a dividend yield of 0.52%.

With this in mind, we used TipRanks to take a look at the newly added risk factors for Agilent.

Risk Factors

According to the new TipRanks Risk Factors tool, Agilent’s main risk category is Legal and Regulatory, representing 29% of the total 34 risks identified for the stock. Finance and Corporate and Macro and Political are the next two major risk categories, each accounting for 18% of the total risks. Agilent recently added two new Legal and Regulatory risk factors.

The company informs investors that it is subject to complex and evolving regulations. It mentions that the increase in costs to comply with the regulations could adversely impact its financial condition. It further cautions that noncompliance could adversely affect its business.

Agilent tells investors that climate change could lead to more stringent environmental protection requirements that may demand adjustments to its manufacturing facilities and processes. It cautions that such adjustments may increase its compliance costs and disrupt its normal business operations.

In an updated Macro and Political risk factor, Agilent reminds investors that COVID-19 vaccine and testing mandates could lead to labor shortages that would, in turn, disrupt its operations. It cites the Biden administration’s vaccine and testing requirements for employees of companies that do business with the government and says that other countries may impose similar mandates. As a result, Agilent cautions that it may be unable to retain its current personnel or attract new ones. It goes on to say that its suppliers may face similar challenges, which could lead to difficulties in accessing certain materials.

The Finance and Corporate risk factor’s sector average is 20%, compared to Agilent’s 29%. Agilent’s shares have gained about 28% since the beginning of 2021.

Analysts’ Take

Following Agilent’s Q4 earnings report, Bank of America Securities analyst Derik de Bruin reiterated a Buy rating on Agilent stock and raised the price target to $179 from $177. Bruin’s new price target suggests 18.21% upside potential.

Consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average Agilent price target of $179 implies 18.21% upside potential to current levels.

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