Agilent Technologies (A) just reported earnings that easily beat expectations. Given the stock's low valuation, I believe this could be the catalyst that powers stock price appreciation in the near term.
Earnings highlights for Agilent:
- Reported adjusted EPS of 78 cents a share, easily beating expectations of 73 cents a share.
- Revenue came in around $20mm above expectations as the company executed well despite the difficult economic environment.
- Narrow its EPS guidance for FY2012 to $3.18 to $3.24 and provided revenue guidance slightly above estimates for 2012 as well.
4 reasons the stock has solid upside at under $39 a share.
- The stock sells for a forward PE of just over 11 times 2013's earnings, a discount to its five year average (16.1).
- The company has tripled operating cash flow from FY2009 to FY2011 and has over $1.5B in net cash on the balance sheet.
- Analysts expect around 5% revenue growth for both FY2012 and FY2013 and the stock has a five year projected PEG of under 1 (.89)
- The 13 analysts that follow the stock have a median price target of $51 a share on Agilent. S&P has a "Buy" rating and a $50 price target on the stock.