巴克莱美股医疗保健行业2018年Q4美国生命科学与诊断10K预览产业要点与模型更新201942145

EquityResearch2April2019COREBarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE139.Restricted-InternalU.S.LifeScienceTools&DiagnosticsThe4Q1810-KReview:IndustryTakeawaysandModelUpdatesInthisreport,weincludeourtakeawaysfromtheCY4Q1810-Kfilingsforourcoverage.Previously,wewouldpublishtheseasstandalonereports;however,we’vefoundthatmanyofthetakeawayscutacrossourcoverageandacomprehensivereviewismorerelevant.Additionally,weincludemodelupdates.Manyofthecompaniesinourcoverageonlyprovidefullfinancialstatementsinthequarterlyfilings,andweincludetakeawaysonsomeofthemoreinterestingdetailsfromthereports.IndustryObservations:1)Forourcoverage,thebasicsharecountsoutlinedinthe10-Ksdecreasedbyanaverageof-0.5%comparedto4Q18basicsharecounts.Notablechanges:ThermoFisher(-0.7%),Waters(-5.1%).2)During4Q18,ourcoveragerepurchased$2.6billioninshares.3)The10-K’sgiveusadditionalgranularityoncapitalvsrecurringrevenuegrowth.In4Q18,ex-Illumina,Instrumentsalesgrew7.3%ex-FXy/y,Consumablesgrew8.2%,andServicegrew10.5%.4)SyneosHealthreportedamaterialweaknessinitsinternalcontrols.CompanyObservations:A:1)AgilentacquiredACEABiosciencesfor$250mmon11/14/2018.2)Newrepurchaseprogramof$1.75bnapprovedon11/19/2018.3)Newdisclosuresaroundrevenuebyregionshow45%ofLSAGrevenuefromAsiaPacific,vs36%inACGandjust15%inDGG.BRKR:Backlogincreased4%y/yto$1.05bn.HOLX:NewdisclosuresongeographicgrowthshowA)MDxgrew22%y/yIntlvs8%inUS(+11%overall).B)MedicalAestheticsdeclined-20%y/yinUS,vs-5%Intl(-13%overall).C)GYNSurgicaldeclined-0.4%y/yinUS,vs+8%Intl(+1%overall).PKI:TheadoptionofASC606added1.4%torevenuegrowthand7.3%toGAAPEBITin2018.TMO:1)TMOagreedtosellitsAPbusinesstoPHCHoldingsfor$1.14bninJan2019.2)TMOalsorepurchased$750mmofstockinJan2019.3)Backlogincreased14%to$5.1bnin2018.AIbacklogincreased9%y/yto$2.24bn.WAT:Threenotablesubsequentevents.A)InJan2019,theBoardofDirectorsauthorizeda$4bnrepurchaseprogram.B)Watersmadeorganizationalchangeswhichresultina1%reductiontoitsworkforce.C)InFeb2019,Watersamendedaterminitsseniorunsecurednoteagreementtoallowanincreaseinleverageforanacquisitionof$400mmormore.Actions:ILMN:We’remaintainingour2019andbeyondannualEPSforecasts,butlowerour1Q19EPSto$1.35(from$1.55,Consensusat$1.38)whichisbetteralignedwithcommentaryonmarginprogressionfrom4Q18earnings.TMO:WeupdateourmodelfortheBrammerBioacquisition.Wemaintain2019EPSat$12.15,andnudgeour2020EPSforecastupto$13.80(from$13.75).Theacquisitionisexpectedtobe$0.10accretivein2020(firstfullyearofownership),thoughwealsomoderatelevelofbuybackinthemodel($5bnnowin2020E,vs$6bnpreviously).WAT:GiventheYTDstockincrease,welowerour2019andbeyondEPSforecaststoreflectthemoremodestimpactfromrepurchase.Welowerour2019EPSestimateto$9.25(from$9.35).INDUSTRYUPDATEU.S.LifeScienceTools&DiagnosticsNEUTRALUnchangedForafulllistofourratings,pricetargetandearningschangesinthisreport,pleaseseetableonpage2.U.S.LifeScienceTools&DiagnosticsJackMeehan,[e-mail],USMitchellPetersen,[e-mail],[e-mail],USBarclays|U.S.LifeScienceTools&Diagnostics2April20192SummaryofourRatings,PriceTargetsandEarningsChangesinthisReport(allchangesareshowninbold)CompanyRatingPricePriceTargetEPSFY1(E)EPSFY2(E)OldNew01-Apr-19OldNew%ChgOldNew%ChgOldNew%ChgU.S.LifeScienceTools&DiagnosticsNeuNeuThermoFisherScientific,Inc.(TMO)OWOW276.19300.00300.00-12.1512.15-13.7513.800WatersCorp.(WAT)EWEW252.98200.00200.00-9.359.25-110.5010.25-2Source:BarclaysResearch.SharepricesandtargetpricesareshownintheprimarylistingcurrencyandEPSestimatesareshowninthereportingcurrency.FY1(E):CurrentfiscalyearestimatesbyBarclaysResearch.FY2(E):NextfiscalyearestimatesbyBarclaysResearch.StockRating:OW:Overweight;EW:EqualWeight;UW:Underweight;RS:RatingSuspendedIndustryView:Pos:Positive;Neu:Neutral;Neg:NegativeBarclays|U.S.LifeScienceTools&Diagnostics2April20193CONTENTSINDUSTRYOBSERVATIONS............................................................................4AGILENT(A).....................................................................................................13BIO-RADLABORATORIES(BIO)..................................................................19BRUKER(BRKR)................................................................................................24CHARLESRIVERLABS(CRL)........................................................................31GENOMICHEALTH(GHDX).........................................................................37HOLOGIC(HOLX)............................................................................................43ICON(ICLR)......................................................................................................