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Bruker (BRKR) Rides on Product Launches Amid COVID-19 Woes

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On Feb 22, we issued an updated research report on Bruker Corporation (BRKR - Free Report) . The company’s recent acquisition and collaborations are a strategic fit. However, currency fluctuations remain a drag. The stock carries a Zacks Rank #3 (Hold).

Over the past year, Bruker has underperformed the industry it belongs to. The stock has gained 22.8% compared with the industry’s 40.7% rise.

Bruker ended the fourth quarter with better-than-expected results. However, year-over-year decline in revenues across two of the reporting segments as well as geographies due to business disruptions is concerning. In 2020, Bruker's revenues declined 4.1% year over year to $1.99 billion, reflecting the impact of the pandemic and the related economic slowdown.

The coronavirus pandemic has been wreaking havoc on the economy and Bruker has also been affected. The company’s 2020 results reflected decline in both reported and organic revenues, primarily due to COVID-19-related disruptions. BioSpin group revenues declined mid-single digits due to COVID-related customer disruption and installation delays.

On a positive note, within Bruker’s Nano Group Semiconductor metrology revenues have been steady year over year, with order rates improving as semi metrology equipment markets are witnessing a rebound.

In fourth-quarter 2020, revenues for NANO's microelectronics and semiconductor metrology products grew double digits as semiconductor markets were strong. During the quarter, Bruker initiated additional restructuring and cost actions within the NANO group to improve the fundamental cost structure while investing in NANO's spatial biology and targeted multi-omics strategy.

Bruker’s CALID Group has been making decent progress of late. During the fourth quarter, the business recorded an improvement of 18.6% year over year, primarily resulting from continued growth in Daltonics microbiology and infectious disease diagnostics, and Life Science mass spectrometry businesses. CALID's microbiology and infectious disease consumables recorded significant growth year over year. Further, Bruker’s high-end diagnostics business gained from strength in polymerase chain reaction (“PCR”) products, mainly in Europe.

BioSpin Group revenues improved 1.5% from the year-ago quarter in the fourth quarter on favorable customer response toward the Avance NEO 1.2 GHz NMR system, which was successfully installed at the Eidgenössische Technische Hochschule (ETH) in Zurich, Switzerland.

Key Picks

A few better-ranked stocks from the broader medical space are DENTSPLY SIRONA Inc. (XRAY - Free Report) , Invacare Corporation and McKesson Corporation (MCK - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

DENTSPLY SIRONA has a projected long-term earnings growth rate of 54%.

Invacare has a projected long-term earnings growth rate of 57%.

McKesson has an estimated long-term earnings growth rate of 8%.

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