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Bio-Rad Banks on Solid Global Scenario, Competition Rife

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On Jun 7, we initiated a research report on Bio-Rad Laboratories, Inc. (BIO - Free Report) . We are upbeat about the company delivering a robust performance overseas, while a tough competitive landscape is a concern. The stock carries a Zacks Rank #3 (Hold).

This California-based manufacturer and global supplier of clinical diagnostics and life science research products has been outperforming its industry over the past year. The stock has gained 30.7% versus the industry’s 15.3% rise. 

Bio-Rad kick-started 2018 on a solid note, with earnings and revenues rising year over year in the first quarter. The company has been strongly progressing with its efforts to strengthen its hold in other geographies. In first-quarter 2018, Bio-Rad derived around 62% of its net sales globally. The company delivered robust performance, primarily in North America, China and the Asia-Pacific region.



Further, constant currency sales at the Life Science segment were particularly strong in North America, China and Europe, while currency-neutral sales at the company’s Clinical Diagnostics segment saw strength in China, Asia Pacific and North America.

We are encouraged by the company’s active portfolio expansion for the blood typing market. In January 2018, Bio-Rad announced the receipt of 510(k) clearance from the FDA for the IH-Incubator L and IH-Centrifuge L instruments to be used with the complete range of Bio-Rad’s IH-System Gel Reagents for manual blood typing methods.

Meanwhile, Bio-Rad operates in a highly competitive environment dominated by firms varying from large multinational corporations to start-ups. Also, the competitive and regulatory conditions in the markets where the company operates limit its ability to switch to strategies like price increases and other drivers of cost increases.

In the Life Science segment, Bio-Rad primarily competes with the likes of Becton Dickinson and Thermo Fisher Scientific (TMO - Free Report) , among others. Again, some prominent competitors in the Clinical Diagnostics segment are Abbott Laboratories (ABT - Free Report) and DiaSorin.

Further, Bio-Rad is exposed to risks associated with a weaker global economy and lower reimbursement rates.

Key Picks

A better-ranked stock in the broader medical sector is Intuitive Surgical (ISRG - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intuitive Surgical has a long-term expected earnings growth rate of 12.1%.

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