Resuming Coverage Post-Biocare; Highlighting Bull/Bear Debate and Model Update

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Resuming Coverage Post-Biocare; Highlighting Bull/Bear Debate and Model Update

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ICP-MS triple quad and 8850 GC should help near-term and re-shoring in the mid/long-term; 3) Source: Factset

unique growth drivers: #1 supplier of GC in semis (3-4% of mix), where growth has been +DD, while

forensics is inflecting higher (+50% in 2Q) as Agilent benefits from the TSA business; 4) upside to

'27: +5.7% growth assumes modest acceleration (<50 bps vs. 200 bps for tools), despite a likely

inflection in NASD (adding $350M of capacity over 6-8 quarters, starts 2H27) and stimulus quotes

are indicative of a return to +M/HSD growth in China... Bears: 1) CAM still a wildcard: +M/HSD CAM

growth requires belief that Agilent will continue to buck trends in chemicals (+MSD in 2Q), while

AMAT remains dependent on strength in semis; 2) NASD not de-risked: debate remains on the

utilization of Train C and D (while Train B is not yet fully-loaded) and bookings visibility, while longer-

term, in-sourcing and competitive alternatives (e.g. enzymatic ligation) remain potential overhangs;

and 3) "just own WAT": Agilent is a turn cheaper on '27 EBITDA, but WAT has clearer EPS upside

over the mid-term as it integrates BD.

Re-shoring call. We recently hosted Agilent's CCO, Dr. Jonah Kirkwood and IR, Tejas Sevant (see

here). Takeaways: 1) with 40+ identified sites, ten active engagements, and initial orders booked,

visibility/confidence is building as projects advance from planning to execution; 2) despite raising

the reshoring TAM to >$500B, Agilent maintained the $300M+ revenue opportunity through 2030,

Tycho Peterson * | Equity Analystsupporting a more de-risked outlook; and 3) early activity suggests re-shoring is additive to global

+1 (212) 738-5583 | tpeterson2@jefferies.com