Barclays downgrades Waters to Underweight on instrument downturn

Barclays downgraded Waters to Underweight from Equal Weight with a price target of $230, down from $270. The analyst cites a lack of visibility on the instrument down cycle and potential recovery, as well as expectations for continued negative sentiment on instrument names for the downgrade. The firm sees some risk to Waters’ Q4 guidance and says 2024 growth is likely to be subdued due to the various headwinds in the biopharma sector impacting demand. Pending clarity on the recovery trends and rebound in instrument demand, Waters will likely underperform relative to companies with more bioprocessing exposure in the tools space as longer-duration investors seem to prefer to own these names first given the consensus that bioprocessing is likely to recover before the instruments side of the equation, the analyst tells investors in a research note.