Agilent Technologies stock has lost nearly a quarter of its value this year after plunging on Wednesday as the maker of laboratory instruments sees lower profits and sales for the year.
Agilent shares (ticker: A) were down 8.7%, at $117.40, early Wednesday, on pace for their largest percentage decrease since March 9, 2020, when they fell 9.9% , according to Dow Jones Market data. The stock is now down 21% since the start of the year. Analysts don't recommend buying on the weakness.
The big drop came after the company posted adjusted fiscal second-quarter earnings of $1.27 per share on Tuesday after markets closed. That was better than the $1.26 a share expected by analysts. But Agilent also trimmed its profit outlook for the year to between $5.60 and $5.65, from up to $5.70 earlier, and it lowered its annual sales outlook to a range of $6.93 billion to $7.03 billion from as much as $7.1 billion.
The lower expectations primarily reflect a loss of demand, especially from small biotech customers who are in strong cash conservation mode as venture-capital lending has fallen , CEO Michael McMullen said in a call discussing earnings. He called the space "pretty much shut down," adding that medium-size and large pharma companies have also become more cautious about spending.
KeyBanc analysts Paul Knight and Harrison Schrage downgraded the stock right after earnings on Tuesday to Sector Weight, or Neutral, from a Buy equivalent rating earlier. This means they see the shares staying around current levels. There is "a lack of revenue catalysts in the back half," the firm's note said.
Citi analysts led by Patrick Donnelly maintained their Neutral call on the stock as well but lowered their price target to $130 from $150 to reflect the uncertainty around instrument demand, according to a Tuesday note.
The next point of focus for investors will be third fiscal-quarter earnings, Donnelly said. Management predicted earnings between $1.36 and $1.38 per share in the quarter ending July. That's a step up from the prior quarter but still lower than Wall Street expectations of $1.40 per share.