Agilent Technologies (A) Hits 52-Week High On Strong Q2

Shares of Agilent Technologies (NYSE:A) hit a new 52-week high of $45.34 on May 17, eventually closing at $44.41. The company returned 4.8% in the past one-year period and has added approximately 6.2% year to date. Average volume of shares traded over the last three months was roughly 1,832K.

What is Driving Agilent Technologies?

Agilent Technologies is a broad-based OEM of test and measurement equipment. The company has shifted its focus to life sciences, genomics, diagnostics and wireless test markets, in which it has made a few important acquisitions and alliances.

The price appreciation can be attributed to Agilent’s strong fundamentals and better-than-expected second-quarter fiscal 2016 results reported on May 16. In response to strong earnings, the stock has gained 3.0%.

In the fiscal second quarter, Agilent reported earnings of 44 cents per share, surpassing the Zacks Consensus Estimate by 5 cents on the back of double-digit core growth in the pharma and food markets. Revenues of $1.02 billion came above the Zacks Consensus Estimate as well as management’s own guided range of $965–$985 million. Growth was broad based across most of the company’s portfolios. On a geographic basis, every region save Japan grew led by robust growth in China.

Moreover, the company provided a solid guidance for the upcoming quarter and raised the guidance for full fiscal 2016. Agilent now projects fiscal 2016 revenues between $4.16 billion and $4.18 billion (previous expectation was $4.10 billion and $4.12 billion) and non-GAAP earnings per share in the $1.88–$1.92 range ( instead of $1.81 to $1.87 projected previously).

Management believes that strength in pharma will continue in the second half of 2016 and into 2017. Also, management expects China to remain strong in the second half of 2016 and 2017.

Also, Agilent has an impressive record of returning cash to shareholders through share buybacks and regular dividends payouts. In the second quarter, Agilent repurchased $94.0 million shares and paid $37 million as dividends.

Moreover, management’s decision to divest/wind up underperforming businesses has enhanced its focus on the new Agilent, while enabling expansion of a solid recurring revenue base and diversification of geographic and industrial operations for growth. Also, the company’s focus on aligning investments toward more attractive growth avenues and innovative product launches is a positive.

Additionally, Agilent delivered an average positive earnings surprise of nearly 8.38% over the trailing four quarters. The Zacks Rank #2 (Buy) company’s solid market position, acquisition strategy, increased focus on segments with growth potential, continued innovation and strong long-term growth potential position it well.

Other Stocks to Consider

Some other stocks that are also well-placed in the technology space include Fabrinet (NYSE:FN) , Rogers Corporation (NYSE:ROG) and TDK Corporation (OTC:TTDKY) , each sporting a Zacks Rank #1 (Strong Buy).

ROGERS CORP (ROG): Free Stock Analysis Report

FABRINET (FN): Free Stock Analysis Report

TDK CORP-ADS (TTDKY): Free Stock Analysis Report

AGILENT TECH (A): Free Stock Analysis Report

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